Strong data point to more hiring

Associated Press

WASHINGTON

Factories are producing more cars, computers and household appliances, and applications for unemployment benefits over the past four weeks are at the lowest point since summer 2008.

Economic data released Thursday suggest that March will be the second- straight month of strong job growth. And the reports helped Wall Street rebound a day after the market suffered its biggest drop in seven months.

Still, rising prices for household necessities and trouble overseas could slow the U.S. economy in the coming months.

“We have a lot of momentum in the U.S. economy right now,” said Kurt Karl, chief economist at Swiss Re. “That’s good, particularly since we’re going to be challenged by higher oil prices” and the impact of Japan’s earthquake and nuclear crisis.

A key reason for the brighter outlook is that factory production increased in February for the sixth- straight month. The Federal Reserve said production of cars and auto parts jumped 4.2 percent, nearly matching January’s gain. Production of furniture, electronics and appliances all rose.

Manufacturing output has grown in all but four months since the recession ended in June 2009. And manufacturers have created 190,000 jobs over the past year, the highest 12-month total for that group since 1998. Last month alone factories added 33,000 net new jobs.

Fewer people are seeking unemployment benefits. Applications fell last week for the third time in four weeks, the Labor Department said. The four-week average has dropped to 386,250 — the lowest level since July 2008. That’s near the 375,000 level that, if sustained, tends to signal declines in the unemployment rate.

The decline is “strong evidence that the labor-market recovery is for real,” said Joshua Shapiro, chief U.S. economist for MFR Inc.

The Conference Board also cited an improving employment picture Thursday while noting that its index of leading economic indicators rose for the eighth-straight month in February. But the group warned that a spike in food and energy costs could slow economic growth.

Inflation in those two areas drove consumer prices up in February by the biggest amount since June 2009, the Labor Department said in a separate report. Though many economists say gas prices are peaking, some expect food will get even more expensive this fall. That’s when consumers will feel the full impact of higher wholesale food prices, which surged last month by the largest amount in 36 years.