The number of Americans filing first-time jobless claims fell last week to the lowest level since President Bush took office, and prices paid to producers rose in January, signs that companies are keeping workers and buying more raw materials in a growing economy.
"These are early signals of a global revival," said James Glassman, a senior economist at J.P. Morgan Securities Inc. "The layoffs stop, you get some pricing power in commodities, and then people start realizing that the recovery is here for good."
Initial claims for unemployment benefits fell to 336,000, the lowest since the week ended Jan. 13, 2001, the Labor Department said Thursday. The department also found that the producer price index rose 0.6%, led by higher energy costs, after a 0.3% increase in December. The Conference Board's index of leading economic indicators was unchanged in February, the weakest reading since March 2003.
The slowdown in firings has yet to translate into higher employment as companies rely on efficiency gains to keep up with demand. Unless the economy adds more than 230,000 jobs a month for the rest of 2004, Bush will become the first president since Herbert Hoover to end a term with fewer jobs than when he started. The last time more than 230,000 jobs were added in a month was May 2000.
The jobless claims numbers for the week ended Saturday declined from 342,000 the week before last and have averaged 348,000 this year, down from 403,000 in 2003. The four-week average of claims, a less-volatile indicator, declined by 2,000 to 344,000, the lowest since 336,500 in the week ended Jan. 27, 2001. The number of people continuing to collect state unemployment benefits jumped by 47,000 to 3.064 million in the week ended March 6.
Excluding volatile food and energy, the so-called core rate of producer prices rose 0.3% in January, the biggest rise in three months, after a 0.1% decrease, the Labor Department said. The report had been delayed as the department worked out problems converting data for one set of industry standards to another.
Energy prices jumped 4.7% in January after rising 1.6% in December. Gasoline prices surged 14.1% after gaining 3.4%.