Other data on Thursday showed that an increase in the cost of gasoline last month pushed up producer prices, but a lack of broad price pressures gives the Federal Reserve scope to maintain its easy monetary policy.
The report on jobless claims added to a range of data — in areas like retail sales, manufacturing and employment — that suggested higher taxes were having a limited impact on the economy.
“The recent labor market data signal at least steady, and potentially improving, job growth so far in 2013 despite the implementation of various forms of fiscal tightening,” said Daniel Silver, an economist at JPMorgan Chase.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 332,000 last week, the Labor Department said.
Economists polled by Reuters had expected first-time applications to rise to 350,000.
The four-week moving average for new claims, a better measure of trends in the labor market, fell to a five-year low.
While the signs of strength in the jobs market could intensify an already lively debate at the Fed on the future course of monetary policy, economists said the central bank was unlikely to scale back its monetary stimulus.
The Fed’s policy makers meet next week to assess the economy and are widely expected to keep buying $85 billion in Treasury and mortgage-backed securities a month in an effort to spur even stronger economic growth. They have said the Fed would keep buying bonds until there was a substantial improvement in the outlook for the labor market.
A second report from the Labor Department offered little reason to worry about an uptick in inflation, with wholesale food prices almost reversing January’s increase and the cost of automobiles rising only marginally.
But gasoline prices jumped 7.2 percent last month, enough to push the Producer Price Index up a relatively steep 0.7 percent after a 0.2 percent advance in January. In the 12 months through February, the index — prices received by farms, factories and refineries — rose 1.7 percent, the fastest rise since October and up from a 1.4 percent gain the prior month.
Underlying inflation pressures remained contained, however, with wholesale prices excluding volatile food and energy costs rising 0.2 percent after a similar increase in January. In the 12 months through February, this so-called core producer price index was up 1.7 percent, the smallest rise since January 2011.
Separately, the United States current account deficit narrowed in the fourth quarter, aided by an increase in services exports and more income earned abroad, the Commerce Department reported Thursday. It said the current account deficit, which measures the flow of goods, services and investments into and out of the country, fell to $110.4 billion, from an upwardly revised $112.4 billion in the third quarter.
Economists polled by Reuters had expected the fourth-quarter current account deficit to widen to $112.8 billion from a previously reported $107.5 billion for the third quarter.
New Jobless Claims at a 5-Year Low – New York Times