U.S. labor market, factory data show economy firming

Thu Aug 22, 2013 10:55am EDT
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By Jason Lange

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits last week held near a six-year low and U.S. manufacturing activity rose this month, suggesting the economy is starting to find firmer footing.

Initial claims for state unemployment benefits climbed 13,000 to 336,000, just above the level expected by economists in a Reuters poll, Labor Department data showed on Thursday.

Despite the increase, the four-week moving average for claims, which smooths out weekly volatility, fell to its lowest level since November 2007. That backed the widely-held view that U.S. economic growth will accelerate in the second half of the year, and hinted at a stronger pace of hiring in August.

"The trend in the data has been signaling some recent improvement in the labor market," said Daniel Silver, an economist at JPMorgan in New York.

Separately, financial data firm Markit said its preliminary index on factory activity rose in August to 53.9, its best showing since March. A reading above 50 indicates expansion.

"Hopefully the faster growth of new orders seen during August will translate into increasingly strong production gains," said Markit chief economist Chris Williamson.

The U.S. economy has grown at a lackluster pace in recent months, hurt in part by the impact of federal budget cuts.

An index of leading economic indicators published on Thursday by the Conference Board rose 0.6 percent in July, supporting the expectations that growth would accelerate in the remainder of the year.   Continued...

A job-seeker completes an application at a career fair held by civil rights organization National Urban League as part of its annual conference, in Philadelphia July 25, 2013. REUTERS/Mark Makela