WASHINGTON – New claims for jobless benefits fell last week in a sign that layoffs may be easing as the economy slowly recovers.
Meanwhile, retailers reported Thursday that sales rose in February by the largest amount since November 2007, a month before the recession began. Factory orders also rose in January, the Commerce Department said.
The reports provide fresh evidence that the economy is steadily growing. But it's not clear when that improvement will translate into new hiring.
The Labor Department said Thursday that initial claims for unemployment insurance fell by 29,000 to a seasonally adjusted 469,000. That nearly matches Wall Street analysts' estimates of 470,000.
Still, last week's drop only partly reverses a sharp rise in claims in the previous two weeks.
The four-week average of claims, which smooths out volatility, fell by 3,500 to 470,750. Despite the drop, the average has risen by about 20,000 since the beginning of the year.
The stock market ticked up on the news. The Dow Jones industrial average rose by about 20 points in morning trading.
Initial claims are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers. But they have been volatile in recent weeks as last month's severe snowstorms in the Northeast have distorted the data.
Claims rose sharply two weeks ago partly because several states processed a backlog of claims that had built up from previous weeks when government offices closed due to bad weather. No states reported backlogs this week, a Labor Department analyst said.
"It might be another couple of weeks until we get a clear picture of where claims are settling in," said Conrad DeQuadros, an economist at RDQ Economics.
In another sign that companies are raising output without adding many jobs, the department said in a separate report that productivity rose by 6.9 percent in the fourth quarter, higher than analysts' expectations of a 6.3 percent rise.
While higher productivity, or output per hour worked, raises living standards in the long run, it also enables companies to get by with fewer workers.
Separately, the number of buyers who agreed to purchase a home fell sharply in January, a sign that demand for housing is sinking this winter as stormy weather slammed Eastern states.
A seasonally adjusted index of sales agreements fell 7.6 percent from December to a January reading of 90.4, the National Association of Realtors said Thursday.
It was the lowest reading since last April and a disappointment to economists, who had expected it would rise to 97.6.
The rise in retail sales reflected gains among a broad array of merchants, from luxury retailer Nordstrom to more mainstream Macy's Inc. Limited Brands Inc. and discounter Target Corp. also reported rising sales on Thursday that beat Wall Street analysts' estimates. The gains came in the face of a decline in consumer confidence.
The Federal Reserve had said in a report earlier this week that the recovery is plodding ahead but not at a strong enough pace to persuade companies to ramp up hiring.
The jobs market "remained soft throughout the nation," the Fed said Wednesday in a report known as the Beige Book.
The Labor Department will issue the February employment report Friday, and economists expect the unemployment rate rose to 9.8 percent from 9.7 percent as employers cut 50,000 jobs. The snowstorms likely inflated the job losses by up to 100,000, economists say.
After growing at a 5.9 percent rate at the end of 2009, many economists believe the recovery lost steam in the first three months of this year. They predict the economy will grow at a pace of around 3 percent from January to March.
High unemployment will likely slow the recovery as it reduces consumers' ability to spend. The economy has lost 8.4 million jobs since the recession began. The Fed expects unemployment to average 9.5 percent to 9.7 percent this year.
The number of people continuing to claim jobless benefits, meanwhile, fell more than expected to 4.5 million, according to Thursday's report.
But the so-called continuing claims do not include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
Nearly 5.9 million people were receiving extended benefits in the week ended Feb. 13, the latest data available, up from about 5.7 million the previous week. The extended benefit data isn't seasonally adjusted and is volatile from week to week.
The Senate on Tuesday approved legislation to continue those extended benefits through the month of March, after Sen. Jim Bunning, a Kentucky Republican, dropped his objection. Bunning had argued the cost of the benefits should be paid for rather than added to the deficit.
The Senate is still working on legislation that would continue the extra benefits through the end of the year.
Associated Press Writers Alan Zibel, Martin Crutsinger, and Anne D'Innocenzio in New York contributed to this report.
PARIS – France's fourth-quarter unemployment rate jumped to the highest level in a decade — 10 percent — an eye-catching figure that is likely to weigh on voters ahead of regional elections.
Joblessness rates have been climbing for seven quarters, since the economy dipped into recession in 2008, but the leap announced Thursday by national statistics agency Insee was especially high, from 9.5 percent in the third quarter.
The last time unemployment was at 10 percent was in 1999, Insee said.
The announcement was an embarrassing setback for conservative President Nicolas Sarkozy, who pledged in a widely watched television interview in late January that joblessness would drop in the coming months.
"Where is the drop in unemployment promised by Nicolas Sarkozy?" the opposition Socialist Party asked in a statement, saying France should have plans to stimulate consumer spending and investment, and also boost efforts to help the unemployed.
Jobs are a main topic of concern in regional elections scheduled for March 14 and 21. Sarkozy came to power in 2007 on a pledge to get France working more, but he ran into trouble pushing through many planned labor reforms even before the economic crisis hit.
Finance Minister Christine Lagarde and the junior minister for employment, Laurent Wauquiez, tried to put a positive spin on the joblessness figures, saying the job market in France has resisted the crisis better than many countries.
France's number of unemployed is 22 percent above its level in May 2007 — when Sarkozy was elected — while joblessness across the 16-country eurozone rose 34 percent in the same period and the United States' rose 119 percent, they said in a statement.
Marc Touati, an economist at Paris-based brokerage Global Equities, said the unemployment rate could not be blamed on the crisis alone. He cited structural problems in the French labor market, saying education and youth training programs are poorly adapted to employers' needs.
Prospects are worst for French youths under age 25: nearly a quarter of them are unemployed.
Touati predicted that unemployment will likely "stay around 10 percent throughout 2010, even if a small drop should nonetheless happen before the end of the year."
Excluding French overseas territories and provinces, where joblessness is higher, the unemployment figure was at 9.6 percent.
When France's quarterly unemployment rate was last at 10 percent in 1999, the labor market had a much different look: The Socialist-led government was pushing through a reform to shorten the workweek to 35 hours, on the rationale that employers would be forced to hire more people.
Ensuing conservative governments have deemed the shorter workweek a mistake, and parliament has substantially chipped away at the law that put it in place, encouraging people to work more.
NEW YORK – Shoppers shrugged off the snow and worries about the economy to buy full-price spring clothing and other items at the nation's malls, resulting in the strongest retail sales gain since November 2007, a month before the recession started.
The upbeat news also helped sooth fears among some economists that weak consumer spending might make the economic recovery short-lived.
A broad array of merchants, from luxury retailer Nordstrom to midbrow Macy's Inc. to discounter Target Corp., reported better-than-expected solid sales increases on Thursday that beat Wall Street analysts' estimates.
The overall 3.7 percent gain in February, according to the International Council of Shopping Centers's index of 31 merchants, came in the face of a decline in consumer confidence, high joblessness and tight credit.
It marked the third consecutive monthly sales increase for retailers, according to the ICSC.
The figures for sales at stores open at least a year are an important measure of retailers' health.
"I am surprised by the broader strength" in the figures, said Mike Niemira, chief economist at the ICSC, who had expected a 2 percent increase. "Everyone is participating in this gain. And that's a good sign for the retail sector and for the economy overall."
When the Great Recession began, shoppers had flocked to cheaper stores from their higher-priced rivals, but Thursday's figures offer clear evidence that consumers, albeit still thrifty, are crawling back to their old higher-price haunts for certain items while still shopping at discounters like TJX Cos. and Target Corp.
Still, while consumers are starting to spend a little more, the figures were boosted partly because sales in February 2009 were so awful.
In February 2009, retailers recorded a drop of 4.3 percent drop, according to the ICSC. That month, consumer confidence hit an all-time low. Moreover, February, sandwiched between post-holiday clearance and spring, is the second-least important month of the year for retailers after January. Analysts see combined data for March and April as a more accurate measure of consumer behavior
But Niemira and other analysts saw encouraging signs from February's reports, saying they were particularly surprised that shoppers were willing to buy shorts and other light clothing even as they trudged through the snow.
Niemira said he also expected midpriced clothing chains to enjoy a recovery later in the spring, and not be in toe with luxury chains.
Analysts still believe it won't be a smooth path to recovery, for retailers or the broader economy.
"The consumer spending recovery is going to be slow, long and gradual," Ken Perkins, president of RetailMetrics, a research firm.
Economists pointed to a lot of noise last month that depressed shoppers' mood but didn't seem to affect spending: gridlock in Congress over the jobs bill, a dive in stock market related to worries about Greece's national debt — not to mention all that snow.
Moreover, a one-month drop typically doesn't correlate with a drop in spending. Still, companies need to start hiring significantly in order for spending to keep improving.
Unemployment, 9.7 percent in January, is expected to increase to 9.8 percent in February.
And economists say snowstorms could have inflated job losses by as much as 100,000. The Labor Department is to report job figures on Friday. In encouraging signs for the economy, the Labor Department reported Thursday that new claims for jobless benefits fell last week reflecting that layoffs may be easing as the economy slowly recovers. Factory orders also rose in January, the Commerce Department said.
Thursday's figures show that while consumers were willing to buy clothing, their focus was still on necessities.
Target, the nation's second largest-discounter behind Wal-Mart Stores Inc., said February sales in stores open at least one year rose 2.4 percent as more customers came into stores and spent more compared with a year ago.
Analysts had expected a 1 percent increase. However, food and household essentials remained the biggest sellers, with furniture and clothing sales about flat with last year.
Rival Wal-Mart Stores Inc. stopped reporting sales results on a monthly basis last year.
Among department stores, Macy's topped expectations and said its sales at stores open at least a year would have gone higher if shoppers hadn't been disrupted by winter storms. The department store operator reported a 3.7 percent gain, above the 1.4 percent estimate.
CEO Terry J. Lundgren said the key sales measure would have been up about 5 percent without the snow.
J.C. Penney reported a 1.2 percent gain. Analysts had expected a 1.3 percent drop.
Upscale retailer Nordstrom recorded a 10.3 percent increase in sales.
Victoria's Secret parent Limited Brands, which raised their February sales outlook last week, enjoyed a 10 percent increase. Gap's sales rose 3 percent in February, beating analyst expectations. Sales in stores open at least one year were flat at namesake Gap stores, and were flat internationally. But the more expensive Banana Republic chain's 6 percent gain exceeded the 5 percent increase at low-price Old Navy, which had typically led the chain's performance.
Abercrombie & Fitch Co., which has struggled with customers defecting to other less-expensive chains, enjoyed a 5 percent sales in February on strength across all divisions; analysts expected a 6.9 percent drop.
(This version CORRECTS to say that Banana Republic's sales rose 6 percent, while Old Navy rose 5 percent, instead of the reverse.)