Data point to US economy improving after bad Q1
Print Edition
THE number of Americans filing new claims for jobless benefits fell last week and factory activity in the mid-Atlantic region accelerated in June, more evidence the economy was strengthening after a disastrous first quarter.
“The economy has improved markedly in recent months,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. “Signs point to continued growth in the coming quarters, and further improvement in labor market conditions.”
Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 312,000 for the week ended on June 14, the Labor Department said.
The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, fell 3,750 to 311,750, not far from a seven-year low touched in May.
Separately, the Philadelphia Federal Reserve Bank said its business activity index jumped to 17.8 this month, the highest level since September, from 15.4 in May. Any reading above zero indicates expansion in the region’s manufacturing.
Gains were driven by a surge in new orders, as well as an increase in factory employment and working hours. There were also improvements in delivery times, shipments, and unfilled orders, which rebounded strongly from May’s slump.
Another report showed a gauge of future growth rose for a fourth straight month in May.
The reports joined data on employment and the manufacturing and services sectors in painting an upbeat picture of the economy after a contraction in the first quarter.
The government said last month the economy shrank at a 1.0 percent annual pace, but economists say more recent data have suggested the contraction was even deeper.
But second-quarter figures, including the reports on Thursday, bolstered the case the Federal Reserve made this week that the economy was bouncing back.
The central bank on Wednesday slashed its 2014 growth forecast, but it further reduced the amount of money it is pumping into the economy each month through bond purchases and hinted at a slightly faster pace of interest rate increases starting in 2015.
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