Friday April 22, 2005 - 08:10:08 GMT
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New Data Show Brighter Picture of US Economy
A drop in new unemployment-insurance claims and a report showing a pickup in
Manufacturing activity in the mid-Atlantic region suggest the economy may have
Gained momentum in April after slowing in March.
Initial claims for jobless benefits plunged 36,000 to 296,000 last week, the
Labour Department said. It was the biggest one-week drop since December 2001.
A department statistician said the drop may reflect the difficulty in
Smoothing for seasonal fluctuations associated with the early Easter.
Nonetheless, it suggests that the prior rise in claims in March didn't signal a
Lasting deterioration in job trends.
He less-volatile four-week moving average of claims fell to 330,250, a
One month low, from 338,750.
Separately, the Federal Reserve Bank of Philadelphia said its index of
Manufacturing conditions in its district soared to 25.3 in April from a
20-month low of 11.4 in March. Any number above zero suggests expanding
Industrial activity in the district, which covers most of Pennsylvania and
Southern New Jersey. Subcategories for new orders, shipments and employment all climbed.
Stock markets and bond yields had plunged in recent weeks on evidence, such
As weak payroll growth, retail sales, factory output and housing construction,
That the economy had lost steam in March. Yesterday, the Dow Jones Industrial
Average soared and bond yields jumped on the brighter picture.
“It looks like things weren't all that weak in March and we're getting a
rebound in some of these early April indicators," said David Resler, chief
economist at Nomura Securities International.
Mr. Resler said bad weather was behind much of March's weakness, noting four
of the Fed's 12 districts blamed weather for poor retail sales in the central
bank's survey of business conditions released Wednesday. Other analysts think
much of March's weakness may be a statistical fluke related to the early
The data released yesterday are volatile and more comprehensive reports to
be released in May might show a different picture. Still, Fed Chairman Alan
Greenspan, in his only comment on the current economy during a congressional
Hearing on budget policy yesterday, said: "Thus far this year, [economic]
Activity appears to be expanding at a reasonably good pace." That was less
Bullish than the "solid pace" the Fed referred to in the statement after it’s
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