Soft U.S. data hints at near-term hiccup in economic growth

Thu Mar 5, 2015 12:00pm EST
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By Lucia Mutikani

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment aid last week rose to its highest level since May, but economists dismissed the increase as weather-related and said the jobs market remained solid.

They were also little perturbed by other data on Thursday that showed factory orders fell in January for a sixth straight month and fourth-quarter productivity declined by more than initially thought.

The reports, however, suggested some near-term weakness in economic growth.

"The underlying fundamentals of the economy remain solid and there is no reason we won't continue to see the type of economic growth and job growth that we saw in 2014 continuing this year," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.

Initial claims for state unemployment benefits rose by 7,000 to a seasonally adjusted 320,000 for the week ended Feb. 28, the Labor Department said. It was the second consecutive week of increases.

While the Labor Department cited no special factors influencing the data, economists said cold and snowy weather in February and a strike by petroleum refinery workers were likely to blame.

Data for the week ended Feb. 21 showed a large number of layoffs in Kentucky because of bad weather.

"We suspect the pattern reflects the weather rather than fundamental deterioration. That said, we will, of course, be on watch for the possibility that the rise in the last two weeks marks a change in the trend," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.   Continued...

People speak with job recruiters at the Nassau County Mega Job Fair at Nassau Veterans Memorial Coliseum in Uniondale, New York October 7, 2014. REUTERS/Shannon Stapleton