U.S. jobless claims almost at 2-year low
7/16/2010WASHINGTON - New U.S. claims for jobless aid tumbled to nearly a two-year low last week, but a modest gain in industrial output and a third monthly drop in wholesale prices in June confirmed a slackening in the economy's recovery.
Other data Thursday also implied the slowdown in manufacturing extended into July, but analysts said there was no evidence the economy was sliding back into recession.
"The numbers are consistent with a slowdown in the rate of growth in the U.S. and the global economy, but not a double dip," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Mass. "The evidence is not saying we have lapsed; the factory indicators are still pointing to growth."
Initial claims for state unemployment benefits dropped 29,000 to 429,000 last week as seasonal layoffs at factories eased, the Labor Department said. That was well below market expectations, which had been for a decline of 450,000.
In a second report, the department said producer prices fell 0.5 percent last month as gasoline prices slid and food costs recorded their largest decline since
April, 2002.
The relatively good news on employment was overshadowed by a Federal Reserve report showing industrial production rose 0.1 percent last month, braking sharply from May's 1.3 percent advance.
Manufacturing output declined 0.4 percent, snapping a three-month streak of gains.
That weakness probably persisted this month, with measures of factory activity in New York state and the mid-Atlantic region slowing sharply from June.