Jobless Claims at New 4-year Low; GDP Growth Estimated at 3%

Nichole Harper
29 Mar, 2012
New York City

U.S. stocks fell for the third day in a row but are set to close the first quarter as the best since April 1998 with the S&P 500 index up 10.9%. Fourth quarter GDP growth was estimated at 3% in the final estimate. European markets declined after labor strikes in Spain paralyzed the nation.

[R]10:45 AM New York – U.S. stocks fell for the third day in a row but are set to close the first quarter as the best since April 1998 with the S&P 500 index up 10.9%. European markets declined after labor strikes in Spain paralyzed the nation.[/R]

U.S. indexes declined after initial claims for jobless benefits declined to a 4-year low last week and the economy expanded at an annual rate of 3% last year.

Jobless benefits claims declined to 5,000 to a seasonally adjusted 359,000, according to the Labor Department today. The weekly jobless claims were the lowest since April 2008.

The weekly claims total for the prior week was revised up to 364,000 from the initial estimate of 348,000. The four-week moving average that smoothens out the volatility declined 3,500 to 365,000.

Total of 3.34 million people continue to receive jobless benefits in the week ending on March 17, a decline of 41,000 from the previous week.

GDP Final Quarter Estimate at 3%

The Commerce Department in a separate report said the economy grew in the final quarter of 2011 at a rate of 3% from the third quarter when the economy expanded at 1.8% annual rate.

The third and final estimate of the economy based on more complete sources of data also indicated that the acceleration in real GDP in the fourth quarter primarily reflected an upturn in private inventory estimates and in private consumption and an increase in residential fixed investment.

The current dollar Gross Domestic Product increased 3.8% in the fourth quarter to a level of $15.32 trillion.

The real GDP increased 1.6% in 2011 following the gain of 3.1% in 2010.

The Commerce Department also said seasonally adjusted personal income in the fourth quarter at a faster pace than previously estimated. Personal income increase to an annual rate of $13.162 billion, $3.3 billion more than reported and disposable income was $10.6 billion more than previously estimated.

European Markets Turn Lower

European indexes edged lower after German unemployment dropped more than expected but sentiment in the euro area dipped slightly in March.

A general strike by Spanish labor unions paralysed the nation with no activity in the metal, mining and textile industries today.

Moody''s Investors Service downgraded the credit opinions of seven Portuguese banks and banking groups.