The number of Americans filing new applications for unemployment benefits tumbled last week to the lowest level in nearly seven years, strengthening views of faster job growth. Thursday's report was the latest sign of momentum in the economy after activity was hobbled by an unusually cold winter.
-- Weekly jobless claim drop 32,000, hit 7-year low
-- Import prices up; food price surge largest in three years
"The return of warmer temperatures has brought with it better data. There are a number of signs that progress in the jobs market could be accelerating, a positive sign for the broad economy as well," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.
Initial claims for state unemployment benefits dropped 32,000 to a seasonally adjusted 300,000 for the week ended April 5, the Labor Department said. That was the lowest level since May 2007, before the start of the 2007-09 recession. The report joined other indicators such as automobile sales and employment data in suggesting the economy ended the first-quarter on a stronger footing, positioning it for faster growth in the April-June quarter.
First-quarter growth is expected to have braked sharply from the fourth quarter's annual 2.6 percent pace, largely because of the harsh weather and businesses placing fewer orders with manufacturers while working off massive stockpiles accumulated in the second half of 2013. Economists had forecast first-time applications for jobless benefits falling to 320,000 for the week ended April 5.
The number of people still receiving unemployment benefits after an initial week of aid for the week ended March 29 hit its lowest level since January 2008. Job growth averaged about 195,000 per month in February and March, with the unemployment rate holding at near a five-year low of 6.7 percent over that period.
The US central bank slashed overnight interest rates to a record low of zero to 0.25 percent in December 2008 and pledged to keep them low while nursing the economy back to health. Minutes of its March 18-19 policy meeting published on Wednesday suggested officials were not eager to start tightening monetary policy. A second report from the Labour Department showed import prices increased 0.6 percent last month after rising 0.9 percent in February.
The increase exceeded economists' expectations of a 0.2 percent gain and was driven by food prices, which recorded their largest advance in three years. Away from food, there was little sign of a broader pickup in imported inflation. In the 12 months through March, import prices fell 0.6 percent, pointing to continued weak imported inflation that is helping to keep a lid on domestic price pressures.
Last month, imported food prices jumped 3.7 percent, the biggest rise since March 2011, after falling 0.7 percent in February. Imported fuel prices rose 1.2 percent last month, slowing from a 5.3 percent surge in February. Stripping out food and fuels, import prices rose 0.2 percent after slipping 0.1 percent in February.
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