Initial unemployment filings dropped more than economists expected, while the Federal Reserve’s Philadelphia branch reported that manufacturing orders in its region were soaring.
The news helped lift the Dow to a nearly 150-point gain by late afternoon.
Bloomberg said the 7.5 jump in the Philadelphia Fed’s general economic index pushed the index to 43.4, its highest point since January 1984 and significantly higher than even the most optimistic estimates of economists. The report came on the heels of one from the New York Fed that also showed manufacturing growth, though not as robust as in the Philly area.
Unemployment claims for the weekend March 12 dropped by 16,000 to a seasonally adjusted 385,000. MarketWatch said economists had been expecting a more modest decline of 12,000. The 4-week average now stands at 386,250, the lowest since July 2008.
The Labor Department also said continuing unemployment claims dropped 80,000 to 3.7 million. Those on extended benefits rose by 54,000 to 4.36 million at the end of February, the most recent data available.
The Conference Board also released its Index of Leading Economic Indicators, which was up .8 percent in February to 113.4. The Index is a measure of trends in the U.S. economy. A rising Index signals a likely strengthening of business.
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“With February’s large gain, the U.S. LEI returned to the strengthening upward trend that began last September,” said Conference Board economist Ataman Ozyildirim. “The LEI is pointing to an economic expansion that should gain more momentum in the coming months. In February, improvements in labor markets, financial components, and consumer expectations more than offset falling housing permits.”
Two other Labor Department reports were also issued. The Consumer Price Index had its largest increase since June 2009, rising last month by .5 percent. Gas and food prices were largely to blame for the jump, although most components of the index were up.
The increase hurt workers who saw their average hourly earnings decline .5 percent, according to the U.S. Bureau of Labor Statistics. “This decrease stemmed from a 0.5 percent increase in the Consumer Price Index,” the BLS noted. Over the 12 months, average hourly earnings declined .4 percent. Only because the average workweek increased did weekly earnings show a .2 percent increase.