Friday, March 19, 2004

Jobless claims continue down

Except for energy prices,
other indicators also optimistic

By Seth Sutel
The Associated Press

NEW YORK - A pair of economic reports released Thursday signaled hope that the long dry spell in hiring could be easing, but economists remained cautious about the prospects of a full recovery in the job market. Another report showed a spike in energy prices.

The Labor Department reported Thursday that the number of new claims for unemployment benefits fell last week for the third consecutive week, driving jobless claims down to their lowest level in more than three years.

The number of laid-off workers seeking jobless benefits fell by 6,000 to 336,000, indicating that the pace of job cuts is slowing. Economists have been hoping that that trend will indicate more hiring, but that has yet to pan out.

David Wyss, chief economist for Standard & Poors, called the report encouraging but stopped short of saying that the job market was on the mend. "People aren't getting laid off, but they also aren't getting hired," he said.

Separately, a private research group in New York - the Conference Board - reported that its forward-looking barometer of economic activity held steady in February and that an indicator of current economic activity rose.

Taken together, the reports suggest that the current growth in the economy will lead to job creation quite soon, perhaps in the next month or two, according to Ken Goldstein, an economist at the Conference Board.

The group's Composite Index of Leading Economic Indicators, a forecast of economic activity over the next three to six months, held steady from January at 115.1 following a gain of 0.4 percent in January.

Economists were somewhat disappointed in the flat reading since it followed 10 consecutive months of gains in the index, a feat that has happened only two other times in the last 30 years, Goldstein said.

The group also reported that its coincident index, a snapshot of the state of the economy, rose by 0.3 percent in February, following a downwardly revised 0.1 percent gain in each of the prior two months.

In another report Thursday, the Labor Department said inflation at the wholesale level jumped by 0.6 percent in January, the largest rise in three months. The increase reflected a big jump in energy prices.

Wholesale prices rose 0.6 percent in January, the biggest increase in three months. That reflected in part the largest jump in energy prices since last March at the start of the Iraq war. Outside of the volatile food and energy categories, the Producer Price Index rose a more moderate 0.3 percent.

The inflation report was delayed by more than a month by a technical glitch.

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