Good Economic News Abounds Late in the Week

The U.S. Labor Department Thursday said that initial jobless claims fell last week, a welcome break from recent news of increasing unemployment and part of a positive turn in economic news.

First-time claims for state unemployment benefits fell 9,000 to stand at 366,000 at the end of last week. The Labor Department cautioned that their office in Puerto Rico was closed for Easter and reported no initial jobless claims.

Labor also revised the previous week’s initial claims down to 375,000 from 378,000. Even with the positive movement, however, the closely-watched four-week moving average of weekly jobless claims remained at 358,000, above the range of 300,000 to 325,000 that economists say indicate a healthy job environment in the U.S.

And more positive consumer data hit the street this morning as incomes unexpectedly grew 0.5 percent in February, according to the Commerce Department. Analysts polled by Reuters and MarketWatch had expected growth of only 0.2 percent. Real disposable incomes increased 0.3 percent, the largest increase in after-tax, inflation-adjusted income since August.

Even with the growth in incomes, consumer spending was flat in February, Commerce said in a separate report. Since November, real consumer spending rose only 0.1 percent.

But economists cautiously applauded the spending numbers Friday saying that while flat consumer spending is bad for the economy, inflation was being kept in check, which may prompt the Federal Reserve to focus on the economy in its policy decisions rather than worry about inflation.