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    Signs of hope for US economy
    From Jeannine Aversa in Washington
    03may02
    NEW claims for unemployment insurance dipped in the US last week, suggesting that companies are laying off fewer workers as the budding economic recovery unfolds.

    The US labour department reported today that for the work week ending April 27, new claims for jobless benefits went down by a seasonally adjusted 10,000 to 418,000, the lowest level since March 23.
    In another report, orders to US factories rose for the fourth straight month, a solid 0.4 per cent rise in March.

    The figure was largely boosted by stronger demand for non-durable goods, such as food, clothes, paper products and chemicals, the commerce department said.

    Total non-durable goods were up 1.6 per cent in March, the biggest increase in two years.

    Orders also rose for some manufactured goods, including metals, construction machinery, household appliances and defence equipment.

    The report reinforces the view that the nation's manufacturers - which sharply cut production and saw hundreds of thousands of jobs evaporate during the recession - are on the comeback trail.

    One government analyst also said the jobless-claims figure was inflated by a technical fluke, and should be even lower.

    The distortion came from a requirement that laid-off workers seeking to take advantage of a federal extension for benefits must submit new claims, he said.

    Congress recently passed legislation signed into law by President George W Bush that provided a 13-week extension of jobless benefits.

    The change has clouded the lay-offs picture for several weeks. But the government analyst said the refiling requirement is having much less of an effect on the claims numbers than in previous weeks.

    The more stable four-week moving average of new claims, which smoothes out weekly fluctuations, also fell last week to 435,750, the lowest level since the beginning of last month.

    But the number of workers continuing to receive unemployment benefits rose to 3.8 million for the work week ending April 20, evidence that people who are out of work are having trouble finding new jobs.

    Economists predict that job growth won't be strong enough in the coming months to prevent the nation's unemployment rate - now at 5.7 per cent - from rising.

    Many economists are forecasting a rise in April's jobless rate to 5.8 per cent and estimating that businesses added around 55,000 jobs during the month.

    Given the fledgling rebound, many economists also expect the Federal Reserve to leave short-term interest rates - now at 40-year lows - unchanged when it meets May 7.



 
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