Fewer Americans filed claims for jobless benefits last week and consumer confidence stabilized, a sign the world’s largest economy is weathering the jump in commodity prices heading into the second quarter.
Business activity expanded in March at close to the fastest pace in two decades, a report from members of a Chicago purchasing managers group also showed, indicating strengthening sales in the U.S. and overseas are helping manufacturers.
“We have an economy that is growing solidly,” said Jim O’Sullivan, chief economist at MF Global Inc. in New York. “Continued strength in manufacturing is the bottom line here. All numbers are pointing to improvement in the labor market.”
The Labor Department also issued its annual revisions to the seasonal-adjustment factors, which caused a “mild upward shift” in the number of jobless claims, an agency spokesman said as the figures were released to reporters.
“The key point here is that the trend is still clearly downwards,” Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y., said in a note to clients. “The labor market recovery is gathering momentum.”
Stocks swung between gains and losses after the reports, restrained by the higher-than-projected number of claims.
A slowdown in firings and growing payrolls may spur further gains in consumer spending, which accounts for about 70 percent of the economy.
Companies added 210,000 workers to payrolls in March after a 222,000 gain last month, while the unemployment rate held at 8.9 percent, economists project a Labor Department report tomorrow will show.