Us emloyment outlook looked bleaker this Thursday as the number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while wholesale or producer prices increased sharply in January, raising potential hurdles for the economy’s recovery.
Initial claims for state jobless benefits increased 31,000 to 473,000, the Labor Department said on Thursday. Financial markets had expected them to fall slightly.
Another report from the department showed wholesale prices paid at the farm and factory gate rose a faster-than-expected 1.4 percent from December as higher gasoline prices and unusually cold temperatures helped boost energy costs.
“The jobs picture is still weak,” said Jennifer Lee, a senior economist with BMO Capital Markets in Toronto. “It will be a while yet before we can get decent, sustained job growth. And until then, prices will also remain in check, although there are some pressures building in the pipeline.”
The disappointing weekly claims and producer inflation data were offset by reports showing stronger gains in regional manufacturing activity and a 10th straight monthly rise in a gauge of the economy’s prospects.
The Philadelphia Federal Reserve’s business activity index rose to 17.6 in February from 15.2 the prior month, while the Conference Board’s index of leading economic indicators rose 0.3 percent last month after a 1.2 percent gain in December.
U.S. stock indexes were up marginally, while the U.S. dollar fell on the weak claims report. Government debt prices dropped on the inflation report.
Last week was the survey week for the employment report for February, which is scheduled for release in early next month, and analysts fear it could disappoint.
The labor market, hard hit by the downturn, has lagged the economic recovery that started in the second half of 2009. The economy has lost 8.4 million jobs since the start of the recession in December 2007.
Concerns about employment affected sales at Wal-Mart during the holiday quarter and the world’s largest retailer said sales in the United States would be more challenging in the first quarter.
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