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New Statistics Point to Pick Up of US Economic Activity - 2003-10-16


A flurry of statistics released in the United States Thursday point to a pick up in economic activity.

The numbers show factories producing at a brisker pace, fewer workers stuck without a job, and fears of a possible deflationary cycle subsiding.

The Federal Reserve says U.S. industrial production registered its biggest gain in more than three years, increasing by 0.4 percent in September. Factory production - the largest component of the statistic - jumped by 0.7 percent. The Fed said firms operated at just under 75 percent of full capacity, the most since March.

Meanwhile, the Labor Department reports that the number of Americans filing new claims for unemployment benefits dipped by 4,000 to 384,000, the lowest level since February. The decline came on the heels of a 17,000 drop in filings the week before.

The Labor Department also reports that prices for consumer goods in the United States rose a modest 0.3 percent in September, led by a steep boost in energy prices that more than offset declines for automobiles and other goods.

Analysts view moderate overall price gains as desirable as the economy emerges from a slow-growth period, since they reduce fears of deflation without prompting massive inflationary concerns that could lead to a hike in interest rates.

Last month, Federal Reserve Chairman Alan Greenspan indicated that a deflationary cycle - whereby weak demand for products causes companies to cut prices, thereby leading consumers to further delay purchases - remained his primary concern.

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