Jobless Claims Continue Decline

WASHINGTON — The number of Americans filing new claims for unemployment benefits unexpectedly fell week, the latest indication the labor market recovery was gaining traction.

Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 332,000, the Labor Department said on Thursday. That was the third straight week of declines. Economists polled by Reuters had expected first-time applications last week to rise to 350,000.

The previous week’s figure was revised to show 2,000 more applications than previously reported.

The four-week moving average for new claims, a better measure of labor market trends, fell 2,750 to 346,750, the lowest level in five years, suggesting a firming in underlying labor market conditions.

The report follows news last week that nonfarm payrolls increased 236,000 in February, with the unemployment rate falling to a four-year low of 7.7 percent.

The sustained pace of steady job gains is starting to push up wages, which should support domestic demand. Though layoffs have ebbed, sluggish domestic demand has made companies cautious about ramping up hiring.

A government report on Tuesday showed layoffs in January were the fewest since 2000. The signs of strength in the labor market could intensify the debate at the Federal Reserve on the future course of monetary policy.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 89,000 to 3.02 million in the week ended March 2. The so-called continuing claims were at their lowest level since June 2008.

Separately, the Labor Department said Thursday that producer prices in February rose by the most in five months, but there was little sign of a broader increase in inflation pressures.

The seasonally adjusted Producer Price Index increased 0.7 percent last month after advancing 0.2 percent in January, the government said. The rise in prices received by farms, factories and refineries was in line with economists’ expectations.

However, underlying inflation pressures remained contained, with wholesale prices excluding volatile food and energy costs rising 0.2 percent after a similar advance in January. The so-called core index had been expected to rise 0.2 percent last month.

Article source: http://www.nytimes.com/2013/03/15/business/economy/jobless-claims-continue-decline.html?partner=rss&emc=rss