by Edwin Mwai|2012
According to CNN Money, the number of first time applicants for unemployment benefits dropped last week to match the four-year low seen in February 2012. On Thursday March 15th 2012, the Labor Department gave figures to the effect that 351,000 individuals filed for initial unemployment benefits in the week that ended on March 10. This figure is down from the previous weeks claims from 365,000 individuals. Amidst all this, the producer prices have seen their biggest increase in five months as from the month of February.
Increase in Gasoline and Pump prices
The New York Times is of the opinion that the recent gains in the gasoline and pump prices will raise concerns that will have the effect of squeezing consumers and businesses and also result in a slowing down of the recovery. The Thursday March 15th 2012 report, suggests that the labor market is improving as a result of the jobless rate holding four-year lows in the month of February. The Federal Reserve was reserved in its optimism and while it acknowledged the recent improvement in the labor market, it is still concerned with the high unemployment rate. These reports are the recent indications yet that the economy is holding its own. However, the growth rate is expected to slow down this quarter from the 3% annualized clip from the fourth quarter.
Jobless claims are taken as a vital component that indicates the strength of the job market. The numbers can at times be very volatile from week to week, a fact that drives economists to look for the four-week averages as broader gauges. Of late, the figure has been declining gradually. The report by the Labor Department comes amid a string of positive signs that the job market is making a turn for the best. The previous week saw government report that hiring rates remained high in the month of February with 227,000 new jobs being created by employers. While this is slower than the rate in January, the hiring was much better than the economists had expected. Economists have opined that a job growth of over 200,000 employment opportunities in the last three months is a strong indicator that of a robust economy.
Increase in Producer Price Index
In its Second report, the Labor Department gave its figure to the effect that its seasonally adjusted producer price index saw an increase to 0.4% up from January’s 0.1%. This is however shy of the 0.5% gains as predicted by economists. In this light the wholesale prices, non inclusive of volatile food and energy costs, increased to 0.2%, a moderation from 0.4% witnessed in January. While this fell in line with the expectations of economists, it was the third consecutive month that has seen an increase in the core producer price index. The overall producer prices experienced a lift of a 1.3% increase in the price of energy following a 0.5% drop in the month of January. The food prices on the other hand witnessed a decrease of 0.1% from 0.3% witnessed the previous month.
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