Lower Jobless Claims, Higher GDP Allays Economic Fears

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The number of Americans filing for new jobless claims dropped to a five-month low last week, while the US economy fared a little better in the second quarter, a separate government data showed on Thursday.

The number of Americans filing for new jobless claims dropped to a five-month low last week, while the US economy fared a little better in the second quarter, a separate government data showed on Thursday.

In a report, the Labor Department said initial unemployment benefit claims dropped to a seasonally adjusted 391,000 last week, beating earlier economists’ forecast of 420,000 for the period.

But despite the positive results in the sector, some economists said that the gains may be short-lived, noting the weakness of the labor market has been undermined by the data model the government used.

They also noted that the total number of unemployed Americans remained at about 3.73 million in the week ended September 17 from the earlier 3.75 million; while in August 2011, the jobless rate was pegged at 9.1 percent.

In a separate report, the Commerce Department said that the US economy, as measured by its gross domestic product, grew by 1.3 percent in the second quarter of 2011 driven by increased consumer spending and export.

Analysts said that the stronger GDP, on top of the positive labor market data, will give the overall economy a strong footing entering into the third quarter.

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