U.S. Jobless Claims Remain Steady, Pointing to Recovering Labor Market

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U.S. Jobless Claims Remain Steady, Pointing to Recovering Labor MarketNew jobless claims applications in the U.S. remained close to the levels last seen before the recession in the week ending April 12, while factory production in the Mid-Atlantic region gained this month, indicating the economy is recovering from the negative effect of the extreme winter weather.

Fresh applications for state unemployment benefits rose 2,000 to 304,000 last week, reported the Labor Department on Thursday, though they still hovered near a 6 ½ -year low that was recorded the previous week. It was also lower than the economists’ prediction of 315,000 fresh applications, according to a Reuters survey.

“The data add further evidence to the notion that the economy has exerted positive momentum at the start of the second quarter,” Sam Bullard, a Charlotte, North Carolina-based senior economist at Wells Fargo Securities told Reuters.

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The claims survey covered nonfarm payrolls. Nonetheless, despite surging last week, fresh unemployment claims have declined 19,000 between March and April, indicating that the labor market is improving. The average job growth per month in February and March was 195,000 per month, while the unemployment rate held steady at 6.7 percent.

An improving job market may raise the possibility that the Fed will hike benchmark interest rates, which have hovered near zero since December 2008.

Separately, the Philadelphia Federal Reserve Bank announced that the state’s business activity index rose to 16.6 in April, compared to 9.0 in March. The reading, which exceeded economists’ estimates of an increase to 10.0, was the strongest in 7 months. A figure above zero shows the state’s manufacturing industry, which straddles Delaware, southern New Jersey and eastern Pennsylvania, has expanded.

New shipments and orders also rose, while factory hiring rose and workers worked more hours than in March. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com