U.S. economy is on a moderate growth path, jobs and consumer price data show
Labor market and consumer prices data showed Thursday that the U.S. economy is on a moderate growth path and that inflation pressures are contained, backing up the Federal Reserve's vow to keep benchmark interest rates ultra-low for some time.
Initial claims for state unemployment benefits fell 5,000, to 457,000 last week, the Labor Department said, suggesting that the jobs market was improving, but only gradually. Analysts said the small decline in initial jobless claims was indicative of a labor market that was slowly healing.
About 8.4 million jobs have been lost since the start of the recession in December 2007, and creating employment is critical to the economy's transition from a government-aided recovery to a self-sustained one. President Obama, who has made tackling unemployment a priority, signed into law a $17.6 billion jobs bill Thursday.
In another report, the department said the Consumer Price Index was unchanged last month after rising 0.2 percent in January. Excluding volatile energy and food prices, the closely watched core measure of consumer inflation inched up 0.1 percent after falling the same amount in January.
Over the past year, core inflation has risen 1.3 percent. That marks a slowdown from January's 1.6 percent reading and is the lowest since February 2004.
"Even though we have growth in the economy, there is still spare capacity that is putting downward pressure on inflation. We think the Fed can be comfortably on hold," said Zach Pandl, U.S. economist at Nomura Securities International in New York.
Citing a moderate economic recovery and low rates of resource utilization, the Fed this week renewed a promise to keep its benchmark interest rate exceptionally low for an extended time.
The economy resumed growth in the second half of last year, led by the manufacturing sector, as factories ramped up production to rebuild inventories that had been reduced to record low levels because of weak demand.