Jobless Claims Lowest in 3 Years

The number of Americans filing initial claims for jobless benefits fell to the lowest level in more than three years last week and wholesalers built inventories at the fastest pace since 1999 in February, according to two government reports released Thursday.

The numbers are seen by some analysts as evidence that companies are growing more confident about the economy.

Initial jobless claims dropped to 328,000 from 342,000 the week before, the Labor Department said. Last week’s filings were the fewest since the week ended Jan. 13, 2001, before President Bush took office.

Meanwhile, inventories rose 1.2% in February, the Commerce Department said.

Profits are rising and the economy may expand at the fastest pace in two decades this year, prompting companies such as optical fiber maker Corning Inc. to hire. Payrolls rose 308,000 last month, the biggest jump in almost four years.

In addition, wholesalers’ sales rose 1.3% in February, more than inventories, keeping the stockpiles on hand at a record-low 1.17 months’ worth.

“Companies are hiring and starting to rebuild inventories, and that is a sign of confidence,” said James O’Sullivan, a senior economist at UBS Securities in Stamford, Conn.

Optimism among U.S. manufacturing executives in March about prospects for the next three to six months reached a record in the first quarter, the Arlington, Va.-based Manufacturers Alliance/MAPI said Thursday.

Its quarterly index of future business activity registered 78 for the first three months of 2004, the highest since the survey began in 1972. The previous high was 77, set in the last quarter of 2003.

UBS estimates that payrolls will expand an average of 175,000 a month for the rest of the year, O’Sullivan said.

Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York economic consulting firm, predicts gains averaging 175,000 to 200,000 jobs a month for the rest of the year.

Payrolls would have to rise at least 200,000 a month through year-end to keep Bush from becoming the first president since Herbert Hoover to end a term with fewer jobs than when he started.

Shapiro had forecast a drop in last week’s initial jobless claims to 335,000, matching the lowest estimate in a Bloomberg News survey of 42 economists. The median projection was 340,000.

“The most recent data suggest the labor market is improving gradually,” Federal Reserve Vice Chairman Roger W. Ferguson Jr. said Thursday in a scheduled speech.

“The question of whether this improvement is fundamental and durable will take some time to answer,” he said.