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To: Return to Sender who wrote (12082)	10/16/2003 11:43:59 PM
From: StanX Long	Read Replies (1) \| Respond to of 95411

Data Show Economy Picking Up Steam Thu Oct 16, 5:49 PM ET Add Business - Reuters to My Yahoo! story.news.yahoo.com By Anna Willard WASHINGTON (Reuters) - The U.S. economic recovery is picking up steam, according to government reports on Thursday that indicated the troubled factory sector has turned around and the lagging job market is starting to improve. Manufacturing activity in the U.S. mid-Atlantic region soared in October, according to a Philadelphia Federal Reserve (news - web sites) gauge of regional industry. Another report showed U.S. industrial production rose in September as factory output posted its biggest gain since April 2000. And in a hopeful sign for job seekers, the number of Americans filing an initial claim for jobless benefits fell last week to the lowest level since early February. "Today's numbers really confirm that the recovery is in full swing," said Scott Anderson, senior economist at Wells Fargo. The Philadelphia Fed reported its business conditions index jumped to 28.0 in October from 14.6 in September. The new orders index soared to 29.0 in September from 19.3 last month, while the employment index turned positive at 5.5, up from negative 4.7 last month. "The Philadelphia Fed results in October are incredibly strong and suggest that the manufacturing sector is beginning to heat up considerably," said Steve Stanley, economist at Greenwich Capital Markets. The dollar rallied against major currencies after the data, and U.S. Treasury bond prices fell. On the stock market the Dow Jones industrial average ended the day slightly lower, falling 11.33 points as investors focused on company earnings. In a separate report, the Federal Reserve said industrial production increased 0.4 percent after falling a revised 0.1 percent in August. Industrial companies operated at 74.7 percent of capacity, their fastest pace since March. Factory production -- which makes up more than four-fifths of industrial output -- rose by 0.7 percent, the largest gain since April 2000. U.S. factories have shed 2.8 million jobs in the last three years, but there are signs employment, which has lagged other areas of the economy, is showing signs of recovery from the 2001 recession. The data supports an anecdotal snapshot of economic conditions across the country from the central bank on Wednesday. The so-called "beige book" said the U.S. recovery gained speed in recent weeks as consumer spending strengthened and manufacturing activity picked up. Most analysts expect the Fed to hold interest rates steady until it is certain the economic rebound has taken hold and created a sustained recovery in employment. San Francisco Fed President Robert Parry said on Thursday he expects to see big employment gains by the end of the year. JOBLESS CLAIMS FALL The Labor Department (news - web sites) said first-time filings for state unemployment aid fell 4,000 last week to 384,000 from the previous week, the Labor Department said. "The jobless numbers were certainly encouraging. We got a decline and it suggests that the labor market is recovering," said Parul Jain, Nomura Securities International. It was the second week in a row that claims came in under 400,000. Economists say a number above that level suggests a deteriorating jobs market. The drop also brought a decline in the closely watched four-week moving average of initial filings, seen as more reliable because it irons out weekly fluctuations. Analysts said the consumer prices report indicated there is little to worry about on the inflation front. Core inflation, which strips out volatile food and energy costs rose 0.1 percent in September, in line with expectations. Over the last 12 months, the core CPI has risen just 1.2 percent, the smallest increase since February 1966, the department said. "Underlying inflation has clearly stabilized. Meanwhile concerns that inflation will decelerate much further are eased by the fact that some service prices continue to rise quite sturdily," said Pierre Ellis, senior international economist at Decision Economics. The overall Consumer Price Index (news - web sites), the most widely used gauge of U.S. inflation, rose 0.3 percent in September, just above analysts' forecasts for a 0.2 percent climb. Helping to boost the overall number was a 6.3 percent increase in gasoline prices, the fastest pace since a 9.9 percent jump in February. Energy costs were up 3.0 percent. A separate report from the Commerce Department (news - web sites) showed companies continue to pare inventories. Stocks at U.S. businesses in August dropped a larger-then-expected 0.4 percent, reflecting a large drop in automobile stocks.