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Jobless Claims Lower; Philly Fed Saw Manufacturing Up in November

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U.S. job creation showed signs of inching forward in the last week, as unemployment claims were reported to be lower, while other positive economic news out of Philadelphia showed manufacturers seeing more demand for their goods.

In the week ending Dec. 11, initial jobless claims fell to 420,000, a decrease of 3,000 from the previous week's revised figure of 423,000, the U.S. Labor Department reported Thursday. The less volatile four-week moving average also dropped, down 5,250, to 422,750, from the previous week's revised average of 428,000.

Continuing claims for unemployed workers, which don’t count the millions of Americans relying on extended benefits, indicated less positive news for the nation’s employment picture. They rose to 4.14 million, an increase of 22,000 from the preceding week, though the four-week average for continuing claims showed improvement at 4.19 million, a decrease of 47,250.

“This is a modest decline but enough to keep both the four-week and eight-week moving averages heading down; the former is now at just 422,750, the lowest since July 2008, before the Lehman bust,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics Ltd., in Valhalla, New York, in an analyst note.

The trend in claims has dropped by about 20,000 between the November and December payroll survey weeks, Shepherdson noted. That should mean private payrolls are about 50,000 stronger in December than November. “We think the easing of credit pressures on small firms is bringing claims down, and there are further declines ahead,” he said.

In other economic news, the Federal Reserve Bank of Philadelphia on Thursday reported that its index of current activity was positive for its third consecutive month, increasing to a reading of 24.3 in December from 22.5 in November.

“The demand for manufactured goods is showing continued improvement: The new orders index increased 4 points this month and has increased for three consecutive months. The shipments index declined 10 points, but it has remained positive for three consecutive months,” the Philly Fed reported, adding that firms’ responses continue to suggest that labor market conditions are improving.

For the fourth consecutive month, the percentage of firms in Pennsylvania, New Jersey and Delaware reporting an increase in employment was higher than the percentage reporting a decline. In December, 17% reported increases versus 12% reporting a decline. Higher prices also were reported, with increases for inputs as well as firms’ own manufactured goods more widespread in December.

“This is certainly a positive report,” Shepherdson said. “The sharp drop which followed the spring plunge in stock prices has now more than reversed.

Read about weekly jobless claims and the Philly Fed survey in November at