The number of people filing new claims for unemployment benefits dropped last week to the lowest level in more than three years and many retailers in March posted a fourth month of solid sales gains, two positive signs for the economy.
The Labor Department yesterday said new applications filed for jobless claims fell from 342,000 to 328,000 for the week ending April 3, an indication companies aren’t shedding workers because they believe the economy is picking up. Weekly jobless claims have not been that low since Jan. 13, 2001.
The lower jobless claims come after employers added 308,000 new jobs last month, the biggest increase in four years.
The nation’s unemployment rate increased, however, edging up to 5.7 percent in March as the number of people looking for work increased.
Economists had expected only a slight decline in jobless claims from the previous week to about 340,000, and yesterday’s new economic data created optimism that companies could begin hiring.
“The basic message is that claims continue to trend lower, a positive sign for the economy,” said Dick Rippe, managing director for Prudential Financial.
In other positive signs for the economy, many retailers reported higher sales last month and inventories at wholesalers increased 1.2 percent in February, the most in four years.
A report by the International Council of Shopping Centers said sales at stores open at least a year increased 7 percent in March. Retailers are posting their strongest year-over-year sales increases since April 2000, the group said.
Same-store sales increased 6.8 percent in February.
Higher sales in March were driven by warmer weather, which boosted demand for seasonal clothing and new fashions. Consumer spending accounts for two-thirds of economic growth, meaning shopping is critical for a recovery.
Apparel chains posted double-digit sales increases. Most department stores also posted gains, and they were up collectively by 6 percent. But sales at Kohl’s fell nearly 1 percent.
Federated Department Stores, which owns Macy’s and Bloomingdale’s, reported a 6.8 percent gain in both same-store and total sales.
J.C. Penney said same-store sales in its department stores rose 11.4 percent. Total sales were up 10.5 percent.
Nordstrom posted a 15.9 percent gain in same-store sales, while total sales increased 19.8 percent.
Discounter Wal-Mart, the nation’s largest retailer, announced a 6 percent gain in same-store sales, and competitor Target posted a 7.3 percent increase.
Same-store sales are not likely to be as strong the rest of the year, said Michael P. Niemira, chief economist at the International Council of Shopping Centers.
“March most likely will be the peak for the year,” he said.
Despite the positive economic reports, stocks fell on Wall Street yesterday as investors remained concerned about increased violence in Iraq.
The Dow Jones Industrial Average fell 38 points to 10,442 in light trading.
The jump in inventories reported by the Commerce Department yesterday shows that companies may have increased production enough to rebuild stockpiles as demand rises.
The gain brought the value of inventories to $299.7 billion, the report said. Supplies had climbed a revised 0.2 percent in January.
Despite yesterday’s positive economic news, rising gasoline prices remain a lingering sore spot.
Motorists can expect gasoline prices to rise another nickel a gallon before the end of June, with bigger increases in the West and Northeast.
Gasoline prices will average $1.76 a gallon throughout the summer as supplies will remain tight and demand increases to record levels, the Energy Information Administration predicted yesterday.
The analysis said fuel prices probably will continue to increase over the next three months and then decline somewhat during the rest of the summer. It said the average between now and the end of June is likely to be about $1.81 a gallon nationwide.
But motorists are still driving as much as usual. The Energy Information Administration estimated that demand for gasoline this summer will average 9.32 million barrels a day, a record. Both the number of drivers and the miles they travel will continue to increase, as they have year after year.
• This story is based in part on wire service reports.
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