ASSOCIATED PRESS
Fewer people signed up for jobless benefits last week, a sign that companies are feeling less inclined to slash their work forces now that the economy is rebounding.
The Labor Department reported yesterday that new applications filed for unemployment insurance dropped by a seasonally adjusted 9,000 to 353,000 for the week ended April 17.
The decline, which came after new applications rose sharply in the previous week, left claims at a level that was higher than the 340,000 analysts were expecting.
Still, the overall trend in new jobless claims filings has been a slow drift downward. Claims hit a high last year of 444,000 in the middle of April.
This year, new filings for jobless benefits each week have managed to stay under 400,000, a sign that the jobs market is getting better, economists say.
In a second report from the department, wholesale prices rose by 0.5 percent in March, up from February’s 0.1 percent increase. Much of last month’s increase reflected higher costs for food products, which jumped by 1.5 percent, and for energy, including gasoline, which went up by 0.6 percent.
With the economy gaining momentum, some companies are finding it easier to raise prices. But Federal Reserve Chairman Alan Greenspan on Wednesday said that inflation remains low and is not a problem for the economy now.
But it is the job of Fed policy makers to be on watch against an unwanted inflation flare-up and take steps to keep prices stable, he said.
At some point, low interest rates must rise to keep inflation in check, Mr. Greenspan said. He didn’t say when that would be.
Most economists agree that the Fed will hold a main short-term interest rate steady at 1 percent, the lowest since 1958, when it meets May 4. Beyond that, analysts offer differing opinions about where rates are heading.
A growing number believe the Fed will start to push rates up later this year, possibly in August. Others, however, don’t believe a rate increase will come until 2005.
Treasury Secretary John W. Snow, in a speech yesterday in New York, said the economy is on “very solid footing; our upward trend is strong.” Like Mr. Greenspan, Mr. Snow didn’t see an inflation problem.
“People wonder if inflation is a threat — but inflation is still modest, so I’m not particularly concerned about it at this point,” he said.
On the labor market front, Mr. Greenspan welcomed a recent burst in hiring. After months of sluggish job growth, the economy added a net 308,000 jobs in March, the most in four years.
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