WASHINGTON (Reuters) — The number of Americans filing new claims for jobless benefits fell sharply last week to a near four-year low, and retail sales rebounded in November, offering hopeful signs for the United States’ struggling economic recovery.
The New York Times
The New York Times
The New York Times
Initial claims for state unemployment aid fell for a fourth consecutive week, dropping by 29,000 to a seasonally adjusted 343,000, the Labor Department said on Thursday. They are now at their lowest level since early October, and within a hair of territory last seen in early 2008.
Another report suggested consumer spending picked up last month despite fear Washington would fail to avoid harsh austerity measures that could push the nation into recession. Worries over the automatic tax increases and spending cuts that would go into effect if Republicans and the White House cannot reach an agreement on the so-called fiscal cliff hit consumer sentiment hard in early December.
A slow but steady improvement in the labor market has helped support consumer spending, which propped up economic growth in the third quarter when business investment sagged.
Economic growth is expected to slow in the fourth quarter, hurt by slower inventory growth and a reduction in investment by companies worried about the continuing economic negotiations.
However, the economy does appear to be bouncing back after Hurricane Sandy, which made landfall in the East Coast in late October and led to a spike in jobless claims.
The four-week moving average for new claims, which irons out weekly volatility, dropped by 27,000, to 381,500.
“The labor market might be improving a bit quicker than expected,” said David Sloan, an economist at 4Cast in New York.
The Commerce Department said retail sales rose 0.3 percent last month, rebounding from October’s 0.3 percent decline. The increase fell short of the forecast in a Reuters poll of economists, but a measure of core sales exceeded expectations.
The core retail sales figure, which excludes automobiles, gasoline and building materials, rose 0.5 percent in November. The government uses this measure to calculate consumer spending.
The Commerce Department also said business inventories, a critical component of economic growth, rose 0.4 percent in October, in line with expectations.
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