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US Jobless Claims Drop, Retail Sales Slip

  • VOA News

U.S. veterans attend the annual Veterans Career and Resource Fair in Miami, Feb. 6, 2015.

U.S. veterans attend the annual Veterans Career and Resource Fair in Miami, Feb. 6, 2015.

Reports published Thursday painted a mixed picture of the U.S. economy, with both unemployment claims and retail sales declining.

The Labor Department said the number of Americans signing up for unemployment assistance last week dropped 36,000, to a nationwide total of 289,000. The drop reversed an increase of 40,000 in the previous week. That jump was probably weather-related, given that low temperatures and storms shut construction sites and schools and caused some temporary layoffs.

Last week's decline in applications confirmed that employers are still confident enough in the economy to hold on to their staffs. The number of people applying for unemployment benefits each week tends to reflect the pace of layoffs.

A separate report from the Commerce Department said retail sales fell six-tenths of a percent in February, the third monthly drop in a row.

Senior economist Gus Faucher of PNC Bank said unusually bad winter weather might have hampered auto sales and restaurant traffic, contributing to the decline. He said he thought consumer spending probably would grow later this year, in part because of savings from lower gasoline prices.

Outside the volatile areas such as food and energy, prices in the overall economy were little changed.

The retail report "doesn't change our view that the economic recovery is strengthening,'' said Paul Ashworth, chief U.S. economist at Capital Economics. "With the labor market on fire, we suspect that incomes, and eventually consumption, too, will continue to grow at a healthy pace.''

The report supported the idea that Americans are still willing to spend. Spending in a category that includes online and catalog retailers — which isn't affected by weather — jumped 2.2 percent in February, the biggest gain in nearly a year.

Economists watch retail sales closely because consumer demand drives most U.S. economic activity.

The sales report paused the dollar's recent rally, tempered the outlook for interest rates and thus helped set off a broad rally on Wall Street, lifting the the Dow Jones industrial average and the Standard & Poor's 500 back into positive territory for the year so far.

The Dow rose 259.83 points, to 17,895.22. The S&P 500 gained 25.71 points, to 2,065.95.

Some information for this report came from Reuters and AP.