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The number of Americans filing new claims for jobless benefits tumbled to a 15-year low last week and consumer spending rose in March, signs the economy was regaining momentum after stumbling badly in the first quarter. The economic outlook was brightened further by another report on Thursday showing a solid increase in wages in the first quarter, which should keep the Federal Reserve on track to raise interest rates this year.
Initial claims for state unemployment benefits fell 34,000 to a seasonally adjusted 262,000 for the week ended April 25, the lowest reading since April 2000, the Labor Department said. Economists polled by Reuters had forecast claims falling to 290,000 last week.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,250 last week to 283,750. Separately, the Commerce Department said consumer spending rose 0.4 per cent last month as households stepped up purchases of big-ticket items like automobiles.
In a third report, the Labor Department said the Employment Cost Index, the broadest measure of labour costs, advanced 0.7 per cent - the largest gain since the third quarter of 2014 - after an unrevised 0.5 per cent rise in the fourth quarter.
