(Adds details, updates markets)
* Weekly jobless claims up, but remain near pre-recession
* Four-week average of claims hits 6-1/2 year low
* Mid-Atlantic factory activity fastest in seven months
By Lucia Mutikani
WASHINGTON, April 17 New claims for jobless
benefits hovered near their pre-recession levels last week and
manufacturing in the Mid-Atlantic region accelerated in April,
suggesting an upswing in economic activity after a brutally cold
Coming on the heels of fairly bullish data on retail sales
and industrial production, Thursday's reports also hinted job
growth may be picking up slightly.
"The data add further evidence to the notion that the
economy has exerted positive momentum at the start of the second
quarter," said Sam Bullard, a senior economist at Wells Fargo
Securities in Charlotte, North Carolina.
Initial claims for state unemployment benefits ticked up
2,000 to a seasonally adjusted 304,000 for the week ended April
12, the Labor Department said, but stayed close to a 6-1/2 year
low touched the prior week.
Economists had forecast first-time applications for jobless
benefits rising to 315,000. The four-week moving average for new
claims, which irons out week-to-week volatility, hit its lowest
level since October 2007.
In a separate report, the Philadelphia Federal Reserve Bank
said its business activity index increased to 16.6 this month
from 9.0 in March. April's reading was the highest in seven
months and beat economists' forecasts for a rise to 10.0.
A reading above zero indicates expansion in the region's
manufacturing, which covers eastern Pennsylvania, southern New
Jersey and Delaware. There was a surge in new orders and
shipments. Factory employment also increased and workers put in
more hours than they did in March.
U.S. stocks were little changed as underwhelming earnings
results from tech giants Google and IBM offset
the fairly upbeat economic reports. Prices for U.S. Treasury
debt fell and the dollar was flat against a basket of
Retail sales and industrial production were robust in March.
Employment has picked up since wobbling in December and there is
some inflation in the economy.
The harsh winter, combined with weak exports and stock
accumulation by businesses, is expected to have cut gross
domestic product to an annual growth pace of around 1.5 percent
in the first quarter after a 2.6 percent rate in the
But the economy is expected to snap back in the second
quarter as the drag from the weather and inventories fades.
Second-quarter GDP growth estimates range as high as a 3.6
Federal Reserve Chair Janet Yellen said on Wednesday the
economy was making "very meaningful progress," adding it was
"quite plausible" it would be back to near full employment by
the end of 2016.
Some economists argue that the recent raft of upbeat data,
especially labor market indicators, suggests there might not be
a lot of slack in the economy, as policymakers believe.
"The jobless claims data also suggest the labor market may
be making progress toward the Fed's labor market objective more
quickly than many policymakers expect," said John Ryding, chief
economist at RDQ Economics in New York.
The claims data covered the survey week for April nonfarm
payrolls. Despite last week's increase, claims were down 19,000
between the March and April survey periods, which suggests an
acceleration in job growth.
Job growth averaged about 195,000 per month in February and
March, with the unemployment rate holding at near a five-year
low of 6.7 percent over that period.
Labor market indicators such as job openings, the duration
of unemployment and short-term unemployment, suggest some
tightening in conditions.
The health of the labor market will most likely determine
when the U.S. central bank starts raising benchmark interest
rates, which it has kept near zero since December 2008.
The Fed is expected to conclude its monthly bond-buying
program later this year and most economists expect the first
rate hike will be in the second half of 2015.
The claims report showed the number of people still
receiving benefits after an initial week of aid dropped 11,000
to 2.74 million in the week ended April 5. That was the lowest
level in the so-called continuing claims since December 2007.
"The ongoing improvement in continuing claims remains
encouraging amid more positive labor market dynamics, suggesting
that workers are not simply leaving the labor force but likely
finding gainful employment," said Gennadiy Goldberg, an
economist at TD Securities in New York.
(Reporting by Lucia Mutikani; Additional reporting by Rodrigo
Campos in New York; Editing by Andrea Ricci and Paul Simao)