Fewer Americans filed new claims for unemployment benefits last week than at any time in the past seven years while consumer prices posted their biggest gain in 10 months, both suggesting that the U.S. economy is recovering from a rough patch during the recent harsh winter.
The U.S. Department of Labor said 24,000 fewer Americans filed for benefits in the week ended May 10 than in the previous week. It reported that the advance figure for seasonally adjusted initial claims was 297,000.
The Labor Department also said Thursday that the major gauge of retail inflation, the Consumer Price Index, rose 0.3 percent in April from a 0.2 percent gain in March.
"Looking ahead, low vacancy rates and the unwinding of some temporary factors will continue to boost rent of shelter and medical inflation respectively. Rising wage growth will trigger a rise in inflation in other areas too. Our forecast doesn’t envisage core CPI inflation rising above 2% until next year, but on this evidence it could happen earlier," Capital Economics researchers told clients in a Thursday note.
April's inflation matched the estimates of analysts polled by Bloomberg and implies a 2 percent annual inflation rate, the level targeted by the Fed as healthy for the economy.
"The all items index increased 2.0 percent over the last 12 months; this compares to a 1.5 percent increase for the 12 months ending March, and is the largest 12-month increase since July," the Labor Department said.