US factory, jobless data show some economic strength

A closely watched gauge of US jobless benefits hit a two-year low last week and factory activity in the country's Mid-Atlantic region accelerated in November, suggesting the economy's recovery was gaining speed. The improving economic picture was further bolstered by a third report on Thursday showing a measure of future economic activity increased 0.5 percent in October.
While the data is the latest to show the economy shaking off a summer slowdown, it is unlikely to deter the Federal Reserve from fully implementing a plan to buy $600 billion of US government debt to stimulate growth. "The economy experienced some weakness earlier, but things are looking better now," said Gus Faucher, director of macroeconomics at Moody's Analytics in West Chester, Pennsylvania.
New claims for state unemployment benefits rose a slight 2,000 to 439,000 last week. However, a four-week moving average - a better gauge of underlying labour rends - hit the lowest level since September 2008, the Labour Department said. In a separate report, the Philadelphia Federal Reserve Bank said its business activity index soared to 22.5 this month - the highest since December - from 1.0 in October.
Any reading above zero indicates expansion in the region's manufacturing, and economists had looked for a reading of only 5.0. A report on Wednesday showed core consumer inflation in October was the lowest since records started 53 years ago. Last month, employers added jobs for the first time since May. The improving labour market trend was also highlighted in the Philadelphia Fed survey, which showed an employment index at its highest since August 2007.
The survey, which closely correlates to Institute for Supply Management's report on national manufacturing due early next month, suggested an unexpected drop in a gauge of New York state factory activity may have given a false signal. The claims data showed the number of people still receiving benefits under regular state programs after an initial week of aid held at a two-year low of 4.30 million in the week ended November 6.
However, taking all programs into account, a total of 8.85 million people were claiming benefits during the October 30 week, the latest for which data is available. About 800,000 people could lose their emergency benefits when they expire on November 30, unless Congress renews them, and a total of two million would lose them by the end of December.