Fears mount on jobless, factory data
NEW YORK (Reuters) - Evidence of U.S. recession mounted on Thursday with reports showing Mid-Atlantic factory activity in its worst slump since the start of the Iraq war and more workers claiming jobless benefits.
Separately, the private Conference Board reported its forecasting gauge fell for the fifth straight month in February, bolstering the view that the U.S. economy has stalled and could face a contraction.
The Economic Cycle Research Institute, a New York-based independent forecasting group, added a further note of pessimism, saying the U.S. economy is "unambiguously" in a recession.
A government report showed the number of U.S. workers filing initial claims for unemployment aid climbed 22,000 last week, while the overall number on the benefit rolls rose a 3-1/2 year high a week earlier.
Factory activity in the U.S. Mid-Atlantic region shrank for the fourth consecutive month in March, according to the Philadelphia Federal Reserve Bank's business activity index, which came in at minus 17.4 this month.
"The key message from this survey is that things are quite bad, but that sentiment has, so far, weakened further than hard activity," Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said about the Philly Fed report.
WORST FEARS
Even so, the Philly Fed index was up from February's dismal reading of minus 24.0. It also beat economists' forecasts and investors' worst fears, which cheered the stock market. But it marked the longest streak of contractions since the February-to-May stretch of 2003.
On Wall Street, stocks .DJI .SPX .IXIC rose, while the dollar extended gains versus the euro and Japanese yen. Prices of government bonds, which usually benefit from signs of economic weakness, slipped after the report.
Together with weakness in other regional data, the Philly Fed survey suggests the national manufacturing sector could post another contraction in March after shrinking for two of the three months through February.
The Organization for Economic Co-operation and Development also said U.S. economic growth is grinding to a halt, stung by what could be the worst housing slump on record.
The Conference Board said its Leading Economic Indicators index fell 0.3 percent, meeting analyst expectations and following a 0.4 percent drop in January, which was originally reported as a 0.1 percent decline.
The last time the leading index "worsened" for five consecutive months was in 2001, during a major U.S. recession, the board said.
"UNAMBIGUOUSLY"
The Labor Department's report suggested a further deterioration in the job market, although it said increases in first-time claims last week and the week before reflected, at least in part, a strike by autoworkers. Continued...
