Fresh US data has shown more signs of economic recovery, with claims for jobless benefits falling and wholesalers stocking up in anticipation of strong holiday demand.
Initial claims for state unemployment benefits dropped 17,000 to a seasonally adjusted 421,000 last week, the Labour Department said, easing doubts about the jobs market after a surprisingly weak November employment report last week.
The bigger-than-expected drop in weekly new claims for unemployment benefits strengthened perceptions that a durable recovery was under way.
“It's another report that suggests the monthly employment numbers that we got last week probably understated the position in jobs, and another number that suggests we're going to get some upside surprises in economic activity,” said Michael Strauss, chief economist of Commonfund, in Connecticut.
The government said last Friday that employers added just 39,000 jobs last month, while the jobless rate spiked to 9.8 per cent from 9.6 per cent.
“Assuming we get the passage of a (tax) plan in Washington, we’re probably looking at a situation where it wouldn’t surprise me if we got either first or second quarter of next year GDP growth near four per cent," Strauss said.
A separate report from the Commerce Department showed wholesale inventories rose 1.9 per cent in October even as sales increased at the fastest rate in seven months, suggesting businesses were growing optimistic about a healthy holiday shopping season.
A third report from the Federal Reserve also household wealth rebounded $1.2trn (£761bn) in the third quarter after falling $1.4trn in the prior period.
US stocks rose slightly on the encouraging data, but gains were limited by this week's rise in US Treasury debt yields and a firmer US dollar.