WASHINGTON: The number of US workers filing new claims for jobless aid fell last week and factory activity in March hit its highest level in more than 5-1/2 years, pointing to a continued expansion in the economy.
The data on Thursday came a day before the release of the government’s closely watched employment report for March, which is expected to show nonfarm payrolls grew only for the second time since the recession started in December 2007.
The labour market has lagged the manufacturing-led economic recovery from the worst downturn since the 1930s.
Job growth is key to sustaining that recovery when the impetus from rebuilding of inventories disappears later this year.
“This is unmitigated good news for the manufacturing sector, which is good news for the progress of the general recovery,” Pierre Ellis, a senior economist at Decision Economics in New York, said of the sturdy manufacturing report.
Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 439,000, the Labour Department said. Markets had expected claims to dip to 440,000.
The data has no impact on Friday’s job figures because it falls outside the survey period for the March employment report.
The four-week moving average of new claims dropped 6,750 to 447,250, the lowest level since September 2008.
Separately, the Institute for Supply Management’s index of national factory activity rose to 59.6, the highest since July 2004, from 56.5 in February. That was above market forecasts for 57.0.
Ruskin, head of currency strategy at RBS Global Banking & Markets in Stamford, Connecticut.
The number of people still receiving benefits after an initial week of aid fell in the week ended March 20 to its lowest since December 2008.
The number of people on extended employment benefits rose, however.
The insured unemployment rate, which measures the percentage of the insured labour force that is jobless, was steady at 3.6 per cent for a fifth week.
Separately, planned layoffs at US firms rose last month, although planned job cuts for the first quarter were down sharply from a year ago, outplacement consultants Challenger, Gray & Christmas Inc said.
While areas such as manufacturing are thriving, continued weakness in the construction sector is holding back the economy’s growth potential.
US construction spending fell for a fourth straight month during February to the slowest rate in nearly 7-1/2 years as activity softened in every major sector from homebuilding to public construction projects, a Commerce Department report showed.
Overall construction spending fell 1.3 per cent to a seasonally adjusted annual rate of $846.23 billion following a revised 1.4 per cent decline in January that previously was reported as a 0.6 per cent decrease.
The February drop exceeded the 1 per cent decline that economists surveyed by Reuters had forecast.
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