First-Time State Jobless Claims Drop Last Week

Far fewer Americans made initial jobless claims than expected last week as the effects of Hurricane Charley faded, government data showed Thursday.

In separate reports, the government also said import prices hit an 18-month high last month and inventories grew in July.

The Labor Department said first-time claims for state unemployment benefits dropped 44,000 to 319,000 last week from 363,000 the previous week.

It was the steepest weekly decline since a 77,000 plunge in the week ended Dec. 8, 2001, three months after the Sept. 11 attacks. A Labor Department analyst said the drop partly reflected a fall in claims from Florida after a surge in the previous week because of Hurricane Charley.

The number handily beat Wall Street forecasts for a fall in claims to 346,000 from the originally reported 362,000 in the previous week.

“The labor market appears to be relatively healthy and steady, but it’s not hot,” said Peter Kretzmer, a senior economist with Banc of America Securities.

Thousands of workers were laid off when the storm hit Florida and temporarily shut down many businesses. Firms are now back in operation, and staff has been rehired.

In addition, the Labor Day holiday on Monday may have affected seasonal adjustment factors, the analyst said.

The four-week moving average of filings, which smooths weekly fluctuations, fell 3,750 to 339,250. Economists noted the average has been stuck around 330,000 to 340,000 for months.

Employment has been a weak spot for the American economy, which grew strongly last year without creating much work, but the picture brightened in August when payrolls grew 144,000.

Strong economic growth has driven commodity markets higher worldwide, and the Labor Department reported sharply higher import prices in August, powered by high petroleum costs.

Import prices rose 1.7% last month, the largest monthly increase since a matching jump in February 2003 and suggesting inflation pressures may be building even though the pass-through to consumers remains restrained.

Wall Street had forecast a milder 0.7% advance. Export prices fell 0.5% compared with a revised 0.5% rise in July.

The cost of petroleum imports increased 9.6% in the month, while nonpetroleum prices increased 0.4%. On a year-on-year basis, import prices were up 7.2% in August while imports excluding petroleum climbed 3.2%.

The Commerce Department said wholesale inventories increased 1.3% in July, compared with 1.1% in June, well ahead of analysts’ forecasts for a 0.7% gain.

“Wholesale sales are up 0.5% over a range of industries, and that is a pretty solid performance,” Kretzmer said.