By John S. McClenahen The U.S. Labor Department reported Oct. 16 that initial claims for unemployment insurance fell to 384,000 last week, right in line with most economists' expectations and one of their most encouraging showings so far this year. Last week's level was 4,000 below the previous week's revised figure of 388,000. The department's four-week moving average for initial jobless benefit claims also moved lower last week, decreasing by 4,250 to 390,750. Significantly, both last week's figure for initial claims and the four-week average are falling further below the 400,000 mark, suggesting that the U.S. labor market is improving. Meanwhile, the U.S. Commerce Department reported that business inventories continue to fall. Manufacturing and wholesale trade inventories were at a seasonally adjusted $1.173 trillion at the end of August, down 0.4% from the end of July. U.S. consumer prices rose 0.3% in September, the same rate as in August, the U.S. Labor Department said on Oct. 16. However, its so-called core CPI (Consumer Price Index) rose only 0.1% last month, the same as in August. The core CPI strips out frequently volatile price changes for food and fuel and is regarded by economists as a respectable measure of underlying inflation in the U.S. economy. "Though growth is picking up, inflation is likely to head lower in the near term," observes Gerald D. Cohen, senior economist at Merrill Lynch & Co., New York. "That's because inflation lags growth . . . it tends to peak in recessions and decline early in recoveries." Finally, also on Oct. 16, the Federal Reserve reported that U.S. industrial production advanced 0.4% in September after having retreated 0.1% in August. Manufacturing output, one of the three categories of industrial production, posted a 0.7% gain in September, while mining output was unchanged from August and utility out decreased 2.2%. Manufacturing's gain in output in September was led by a 6.6% increase in motor vehicle production. "[The] report that manufacturing production surged in September is the strongest evidence yet that a long-awaited resurgence of manufacturing is fully underway," says Jerry J. Jasinowski, president of the Washington, D.C.-based National Association of Manufacturers. There remains plenty of room for U.S. industrial production to grow, however. The Federal Reserve reported that capacity utilization in manufacturing was at 73.1% in September, in mining at 84.9%, and among utilities at 82.4%.