The number of Americans filing new claims for unemployment benefits fell last week to its lowest level in seven years, fresh evidence that the labor market was strengthening.
Meanwhile, U.S. consumer prices recorded their largest increase in 10 months in April, pointing to some inflation in the economy.
Initial claims for state unemployment benefits declined 24,000 to a seasonally adjusted 297,000 for the week ended May 10, the Labor Department said on Thursday. That was the lowest reading since May 2007 and brought claims back to their pre-recession level. Claims for the week ended May 3 were revised to show 2,000 more applications received than previously reported.
Economists polled by Reuters had forecast first-time applications for jobless aid ticking up to 320,000 last week. Claims had been volatile in recent weeks because of difficulties adjusting the data during the Easter and Passover holidays and school spring breaks, which fall on different calendar days every year.
A Labor Department analyst said there were no special factors influencing the state level data.
The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, fell 2,000 to 323,250. The labor market is strengthening after wobbling in December and January because of an icy-cold winter. Nonfarm payrolls increased 288,000 in April and economists expect job gains to average 200,000 for the rest of the year. That should stimulate demand and boost economic growth.
The claims report showed the number of people still receiving benefits after an initial week of fell 9,000 to 2.67 million in the week ended May 3, the lowest level since December 2007.
In a separate report, the Labor Department said its Consumer Price Index increased 0.3 percent last month as food prices rose for a fourth consecutive month and the cost of gasoline surged. That was the biggest rise since June last year and added to March's 0.2 percent rise.
In the 12 months through April, consumer prices rose 2.0 percent after gaining 1.5 percent in March. That was the biggest increase since July last year and in part reflected prices coming off last year's low base when energy costs decreased.
Economists polled by Reuters had forecast the CPI increasing 0.3 percent from March and gaining 2.0 percent from a year ago.
Stripping out food and energy prices, the so-called core CPI rose 0.2 percent after advancing by the same margin in March.
In the 12 months through April, the core CPI increased 1.8 percent. That was the biggest gain since August last year and followed a 1.7 percent rise in March.
Economists had forecast the core CPI rising only 0.1 percent from March and 1.7 percent from a year-ago.
The Federal Reserve targets 2 percent inflation and it tracks an index that is running even lower than the CPI. Policymakers worry that inflation is running too low, but the steady increase in prices should ease those concerns.
A report on Wednesday showed a strong rise in producer prices in April, with increases spread from goods to services, leaving economists to anticipate gains in consumer inflation in the months ahead.
Food prices rose 0.4 percent in April, rising by the same margin for a third consecutive month. A drought in the West pushed up prices for meat, dairy, fruit and vegetables. Poultry and fish prices also rose as did the cost of eggs.
Gasoline prices rose 2.3 percent, advancing for the first time since December. That rise offset a 2.6 percent plunge in electricity prices, which was the largest drop since 1986.
Within the core CPI, shelter costs increased 0.2 percent, slowing from the prior month's 0.3 percent rise. There were also increases in medical care costs, used cars and trucks prices and airline fares.