Applications for Unemployment Benefits Hits Seven-year Low

Signs of the gaining of momentum for the economy continue as the fewest workers since 2007 filed for unemployment benefits and consumer prices rose at the highest rate in 10 months. Jobless claims dropped by 24,000 to 297,000 for the week ending May 10, beating projections by economists surveyed by Bloomberg. The consumer price index increased by 0.3 percent in April, the most since June 2013. And while companies remain cautious about hiring, firings have continued to slow as customer spending rebounds.

“The way the job market continues to improve, the number of people collecting benefits keeps going down,” said Brian Jones, senior U.S. economist at Societe Generale in New York. “The labor market is fine.”

Conversely, stocks declined as output at factories, mines, and utilities decreased 0.6 percent in April, after a 0.9 percent gain in March. Manufacturing, an industry making up 75 percent of total production, decreased by 0.4 percent in April. The yield on the 10-year Treasury note also fell seven basis points to 2.47 percent.

The four-week average of jobless claims dropped to 323,250 from 325,250 the week before. The number of people collecting benefits declines slightly to 2.67 million for the week ending May 3; the fewest since December 2007. Employers added 288,000 jobs in April, the biggest increase since January 2012.