Hopes abound for 2Q growth after slow 1Q

New economic numbers suggest that the economy is poised for faster growth after a disappointing first quarter.
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New economic numbers suggest that the economy is poised for faster growth after a disappointing first quarter.

The number of Americans who filed new claims for jobless benefits fell last week to a 15-year low and consumer spending climbed in March.

An additional report on Thursday showed a solid increase in wages in the first quarter and Reuters said that should keep the Federal Reserve on track to raise interest rates this year.

Initial claims for state unemployment benefits fell by 34,000 to a seasonally adjusted 262,000 for the week that ended April 25, the lowest reading since April 2000, the Labor Department said. The decline bolstered views that March's sharp moderation in job growth was probably an aberration.

Separately, the Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4 percent last month as households stepped up purchases of big-ticket items such as automobiles.

The increase followed a 0.2 percent gain in February and indicated that consumer spending picked up momentum at the end of the first quarter, which bodes well for consumption in the April-June period.

The economy slowed to a crawl in the first quarter as it struggled with severe winter weather, a now-settled labor dispute at normally busy West Coast ports, the strong dollar and lower energy prices, which have cut into domestic oil production.

“What we went through over the first quarter was simply a soft patch related to the weather and port strikes,” Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York, told Bloomberg. “Ending the quarter on a pretty strong note like spending did is indicative of an economy that seems poised to rebound.”

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