The number of Americans filing new claims for jobless benefits edged higher last week, but a trend reading dropped to its lowest in five years and pointed to ongoing healing in the labour market.
The Labor Department said initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 336,000, which was less than analysts had expected.
The four-week moving average for new claims, a measure of labour market trends, fell 7,500 to 339,750, the lowest level since February 2008.
That could bode well for job growth in March.
Last week’s claims data covered the survey period for the government’s monthly tally of nonfarm jobs. The four-week average of new claims fell 6 percent relative to the survey week in February, when nonfarm payrolls increased by 236,000.
“There is enough strength in the economy to generate jobs on a sustained basis,” said Sam Bullard, an economist at Wells Fargo in Charlotte, North Carolina.
Bullard noted however that government belt tightening and the growing risk of a flare-up in Europe’s debt crisis created headwinds for the economy.
On Wednesday, the Federal Reserve also said it was concerned about these headwinds when it pressed forward with its aggressive policy stimulus.
The Fed action came despite a rash of recent data showing the economy gathering strength. Retail sales have been stronger than expected, manufacturing output has picked up and employment growth has quickened, with the jobless rate dropping to 7.7 per cent last month from 7.9 per cent in January.
An industry survey on Thursday showed U.S. manufacturing growth quickened in March and the pace of hiring increased.
The central bank said it will continue buying $85-billion (U.S.) in bonds per month, pledging to keep up its asset purchases until it sees a substantial improvement in the labor market outlook.
Economists polled by Reuters had expected 342,000 first-time applications for jobless claims last week.
Investors in U.S. stocks appeared to brush off the claims data and futures on U.S. shares were little changed.
A Labor Department analyst said jobless claims data had not been estimated for any states and there were no special factors influencing the report. The prior week’s claims figure was revised to show 2,000 more applications than previously reported.
Last week, the number of people still receiving benefits under regular state programs after an initial week of aid rose 5,000 to 3.053 million in the week ended March 9.
As well, factory activity in the U.S. mid-Atlantic region grew in March after contracting for two months in a row as new orders and employment improved, a survey showed on Thursday.
The Philadelphia Federal Reserve Bank said its business activity index rose to 2 from minus 12.5 in February, topping economists’ expectations for minus 2.
Any reading above zero indicates expansion in the region’s manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
New orders rose to 0.5 from minus 7.8, while the gauge of the number of employees gained to 2.7 from 0.9
The is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.Report Typo/Error