The US economy is showing renewed strength as retail sales surged last month and factory orders also increased. Yet there's little evidence such growth will lead to more hiring soon - unless recent gains in consumer spending force companies to add workers.
Retailers report that sales rose in February by the largest amount since November 2007. And orders to US factories in January posted their sharpest rise in four months. That was its best showing since September and another sign that manufacturing is helping drive the economic recovery.
Initial jobless claims are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers. They have been volatile in recent weeks, because last month's severe snowstorms in the Eastern United States affected the data.
The strong retail-store sales report reflected solid gains from merchants ranging from luxury retailer Nordstrom to midbrow Macy's to discounter Target.
"I am surprised by the broader strength" in the figures, said Mike Niemira, chief economist at the International Council of Shopping Centers. "Everyone is participating in this gain. And that's a good sign for the retail sector and for the economy overall."
The gains came despite weak reports recently on consumer confidence. And the Federal Reserve said in a report this week that the economy is growing, but too slowly to persuade companies to ramp up hiring. The jobs market "remained soft throughout the nation," the Fed said Wednesday in a report known as the Beige Book.
The Labor Department will issue the February employment report Friday, and economists expect the unemployment rate rose to 9.8 per cent from 9.7 per cent and that employers cut a net total of 50,000 jobs. But the snowstorms likely inflated the job losses by up to 100,000, economists say.
High unemployment could slow the recovery if it reduces consumers' ability to spend. The economy has lost 8.4 million jobs since the recession began. The Fed expects unemployment to average 9.5 per cent to 9.7 per cent this year.
In its report on jobless claims, Labor said the number of people continuing to claim jobless benefits fell more than expected to 4.5 million. But these so-called continuing claims don't include millions of people who have used up their regular 26 weeks of benefits and are receiving extended benefits for up to 73 more weeks.
Nearly 5.9 million Americans were receiving extended benefits in the week ended Feb. 13, up from about 5.7 million the previous week. The data on extended benefits aren't seasonally adjusted and are volatile from week to week.
The Senate on Tuesday approved legislation to extend those extended benefits through March, after Sen. Jim Bunning, a Kentucky Republican, dropped his objection. Bunning had argued the cost of the benefits should be paid for rather than added to the deficit.
The Senate is still working on legislation that would continue the extra benefits through the end of the year.
©2010AP