US recovery stumbles on jobless jump

Tim Wallace
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NEW jobless benefit claims in the US were higher than expected last week, official data showed yesterday, while manufacturing activity slowed in April for the first time in five months.

Initial jobless claims fell to 386,000 in the week to 14 April, from an upwardly revised 386,000 in the previous week and higher than the 363,000 average of the previous four weeks, the Labor Department revealed.

Meanwhile the Philadelphia Fed’s manufacturing index slowed from 12.5 to 8.5 into April, hitting its lowest level since January and slumping well below economists’ expectations.

Any reading above zero indicated output expansion.

However, economists were hopeful that the economy will quickly bounce back.

“An easing in manufacturing growth is not too much of a concern when other parts of the economy [such as consumption] seem to be doing well enough,” said Paul Dales from Capital Economics.

“So as long as labour market conditions don’t deteriorate markedly, a 2011-style collapse in economic growth remains unlikely.”

Sales of pre-owned homes fell 2.6 per cent in March, according to new data from the National Association of Realtors (NAR), though sales remain 5.2 per cent above the level seen in March 2011.

“With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year,” said NAR’s Lawrence Yun.