Thursday, May 16, 2013

Data raises questions about strength of U.S. economy

The U.S. economy showed worrisome signs as jobless claims rose sharply last week while ground-breaking at home construction sites tumbled in April and a gauge of underlying inflation pointed to weak demand.

The data could fuel fears over the impact of a government austerity drive that began in January, and could raise pressure on the Federal Reserve to keep its money printing press running on overdrive as the central bank buys bonds to support the economy.

The number of Americans filing new claims for unemployment benefits climbed last week at the fastest pace in six months, the Labor Department said on Thursday. Initial claims for state unemployment benefits jumped by 32,000 to 360,000. That was the biggest jump since November and confounded analysts' expectations for a more modest increase.