Jobless claims, retail sales show resilience

By Nancy Waitz

WASHINGTON (Reuters) - The number of U.S. workers filing claims for initial jobless benefits fell last week and retail sales rebounded last month from a dismal March, suggesting the economy, while soft, was not crumbling rapidly.

Many economists have concluded the U.S. economy is in recession. However, a string of recent data, including reports on Thursday, has strengthened the hand of analysts who argue the United States economy may be able to avoid contraction.

Initial claims for state unemployment benefits fell to 365,000 last week from 383,000 in the prior week, the Labor Department said. The level was slightly lower than Wall Street had expected.

The number of people still on the benefit rolls after drawing an initial week of aid fell 10,000 to 3.02 million in the week ended April 26, the latest period for which figures were available. Continued claims remained above 3 million for the second straight week, a level not seen since April 2004.

"The (labor market) picture is not very good but it doesn't seem to be getting dramatically worse," said David Sloan, an economist for 4CAST LTD in New York.

Separately, 68 percent of U.S. retailers reported better-than-expected sales at stores open at least a year, partly reflecting strong results at discount chains as consumers tried to hold down food expenses.

The International Council of Shopping Centers reported April U.S. chain store sales rose 3.6 percent from a year ago on a same-store basis, partly because Easter was in March. The holiday, which usually falls in April, takes away one shopping day and reduces total sales for the month.

"In addition, there was some modest pent-up demand with more seasonable weather early in the month, along with some increased promotional activity, which helped to explain the strongest monthly performance in more than a year," said Michael Niemira, ICSC's chief economist.