- Man shot by police ID'd; witness shares his side of story (2/17/17)31
- MSHP: McLendon shot in side; autopsy refutes witness account (2/19/17)23
- Apparent punch at girls basketball game propels lawmaker into action (2/21/17)4
- Cape officer shoots man inside a home (2/16/17)7
- Business notebook: Owners ready to roll out the Barrel 131 (2/20/17)4
- Former Cape cop indicted on possessing child porn (2/17/17)
- Man dies after being shot by officer; said to have come at cop with knife (2/16/17)29
- Missouri bill would limit transgender school bathroom access (2/22/17)42
- Annual father-daughter dance provides some fun bonding time (2/19/17)1
- Cape businessman known for starting NARS dies at 49 (2/23/17)3
Nation's jobless claims drop
NEW YORK -- The number of new people signing up for jobless benefits dropped last week and a closely watched gauge of future economic activity rose more than expected in May, suggesting the U.S. economy can continue a sturdy expansion through the summer.
In another sign of a broadening recovery, the Labor Department's Producer Price Index, a measure of prices before goods reach store shelves, posted the largest increase in more than a year.
While that raised some concerns about inflation, it also indicated that businesses more confident in the economy's growth are able to raise wholesale prices.
The Labor Department reported Thursday that new applications filed for unemployment insurance fell a seasonally adjusted 15,000 to 336,000, the lowest level since May 8.
Meanwhile, the Conference Board said its Composite Index of Leading Economic Indicators increased 0.5 percent to 116.5 in May following a 0.1 percent rise in April.
The closely watched gauge suggests the U.S. economy will continue expanding into the fall.
And the Labor Department said in a third report that its Producer Price Index rose 0.8 percent in May following a 0.7 percent rise in April. It was the largest increase since a 1.3 percent spike in March 2003.
The index, which measures prices of goods before they reach store shelves, reflected higher prices for energy and food but it also indicated that businesses more confident in the economy's growth path feel comfortable raising prices at the wholesale level.
Mark Vitner, senior economist at Wachovia Securities in Charlotte, N.C., said "it may be the last blast of really large price increases," noting that crude oil prices have come down in recent weeks and that other commodity prices, including lumber, have been softening.
The big question is how the Federal Reserve will read the latest data when it meets at the end of the month to review its interest rate policy.
"The real debate is whether this is a significant increase we're seeing here that has to be met with a more aggressive posture from the Federal Reserve," said Anthony Chan, senior managing director and chief economist at Banc One Investment Advisors in Columbus, Ohio. "I don't see that in these numbers."
Federal Reserve Chairman Alan Greenspan has been sanguine about inflation, too. He told Congress earlier this week that he is not worried that the country is on the brink of an unwanted surge in inflation. Any rate increases by the Fed would be at a measured pace unless economic conditions change, he said.
Economists widely expect the Fed to boost short-term interest rates for the first time in four years at its next meeting June 29-30.
The Fed's key short-term interest rate is at a 46-year low of 1 percent. Most economists are expecting a 0.25 percentage point increase.
The 0.5 percent rise in the Conference Board's index, which forecasts economic activity, was larger than the 0.4 percent analysts had expected.
Ken Goldstein, economist for the New York-based business group, noted that the index has risen in 13 of the last 14 months. The latest numbers, he added, "reflect a robust economic environment this spring and point to more of the same this summer."
Eight of 10 indicators that make of the leading index increased in May. They were average weekly manufacturing hours, the money supply, interest rate spread, vendor performance, building permits, manufacturers' new orders for consumer goods and materials, a drop in initial claims for unemployment and manufacturers' new orders for nondefense capital goods.
The negative contributors were consumer expectations and stock prices.
The Labor Department's inflation report indicated that excluding energy and food prices, "core" wholesale prices rose 0.3 percent in May, after a 0.2 percent rise the month before.
The readings on overall wholesale prices as well as the core rate of inflation were higher than economists were expecting. They were forecasting a 0.6 percent increase in the PPI and a 0.2 percent rise in core prices.
In May, wholesale prices for energy products rose 1.6 percent for the second month in a row. The price of crude oil, which peaked at around $42 a barrel in late May, is expected to ease later this year, analysts say. That should help energy prices calm down, they say.
Food prices, which are also being pushed higher because of more expensive transportation costs due to higher fuel prices, rose 1.5 percent in May, following a 1.4 percent advance in April.
On the Net: