Jobless claims data brightens jobs picture

Thu Mar 14, 2013 9:17am EDT
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By Lucia Mutikani

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits dropped for a third straight week last week, the latest indication the labor market recovery was gaining traction.

Other data on Thursday showed a spike in the cost of gasoline pushed up producer prices last month, but the lack of broad price pressures gives the Federal Reserve scope to maintain its very accommodative monetary policy stance even as the job market strengthens.

Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 332,000, the Labor Department said. Economists polled by Reuters had expected first-time applications for jobless aid to rise to 350,000.

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.

"This report reinforced the message we got from last Friday's payroll report. There is a speed-up in the economy. The economy is healing," said Pierre Ellis, senior global economist at Decision Economics in New York.

U.S. stock index futures rose after the data, along with yields on U.S. government debt. The dollar extended gains against the yen and the euro.

In a second report, the Labor Department said its seasonally adjusted Producer Price Index increased 0.7 percent last month after advancing 0.2 percent in January.   Continued...

Job seekers stand in line to meet with prospective employers at a career fair in New York City, October 24, 2012. REUTERS/Mike Segar