U.S. Jobless Claims Drop; Leading Indicators Flat

By Agence France-Presse The ranks of America's newly unemployed dropped to a three-year low last week as employers spared the jobs ax, government data showed March 18. The number of people lodging new claims at unemployment benefit offices in the week ending March 13 slid 6,000 to a seasonally adjusted 336,000, the lowest since January 13, 2001. "It is moving in the right direction, downwards, indicating that we are seeing a reduced pace of layoffs in the U.S. economy," said BMO Financial Group senior economist Sal Guatieri. "That is the good news. The bad news is we have yet to see any increase in the pace of hiring, and that is because American businesses are still focused on raising efficiencies and organizing their operations around information technology." A four-week average of new claims for unemployment benefits fell 2,000 from the previous week to 344,000, the U.S. Labor Department report showed, down about 60,000 in the past six months. Meanwhile, a key barometer of future U.S. economic activity, the Conference Board index of leading economic indicators, was flat in February, the business research group said. The index was unchanged in February after a revised 0.4% increase in January and a similar 0.4% rise in December. Nonetheless, the Conference Board said the index suggests the U.S. economic expansion remains strong, despite the risks posed by sluggish job growth. "Sustained consumption and strong investment should start to induce stronger job growth," said Conference Board economist Ken Goldstein. "What is unusual about the current business cycle, however, is the delay between the strengthening economy and the hiring of new workers. But the labor market should start to improve, barring a major disruption in the economy." Copyright Agence France-Presse, 2004