Industrial production in March inched up just 0.1%, but mild weather led to a sharp drop in utilities production, masking a 0.9% rise in manufacturing.
Surveys of the goods-producing sector last month reflected an acceleration in production, and data out today suggest further increases are occurring in April.
That’s not very surprising since demand from consumers and businesses is starting to pick up, and companies are scrambling to replenish empty shelves and stock up to meet rising demand.
We saw a solid retail sales number yesterday, see Strong retail sales signal growing confidence, suggesting the the recovery, which so far has been mostly concentrated in manufacturing, is starting to spread to the rest of the economy.
That is why the latest 24,000 jump in weekly jobless claims to 484,000 is a bit discouraging.
The Labor Department blamed factors related to the Easter holiday; however, claims have been stuck at elevated levels since late last year.
In early January, rising jobless claims were blamed on difficulties adjusting for the holidays. Then the severe winter weather was cited for claims that wouldn’t fall much below 450,000, confounding analysts who had anticipated a dip to 400,000 or below.
Now the two-week jump is being blamed on Easter. Whatever the reason – and there definitely seems to be a disconnect between claims and recent signs that the economy is coming back to life – companies are not only showing a reluctance to hire, but also seem quick to pull the trigger when it comes to layoffs.
I suspect that continued growth in the economy will eventually put the closely-watched gauge of the job market and economic activity on a downward path, while rising sales should also spark gains in payrolls.
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