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Another Mixed Batch of Economic Data

Weekly jobless claims fall, but stay near the 400,000 level.
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The economic data released Thursday were mixed, signaling potentially better growth in the coming months, but indicating that the nation's labor market continues to have trouble rebounding convincingly.

Weekly initial jobless claims declined, but stayed close to the key 400,000 mark. The Labor Department reported that first-time claims fell to 399,000 in the week ended Sept. 13, from a revised 428,000 the previous week, for the first decline in four weeks.

However, the four-week moving average, which smoothes out weekly variations, rose for the fourth consecutive week to 410,750 from 408,750.

"It's a pretty significant development that claims fell back below 400,000," said Stephen Stanley, senior market economist at Greenwich Capital Markets. "Even though the four-week average is still on the high side, the weekly drop is a bit of a relief."

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Separately, the Philadelphia Federal Reserve's manufacturing index slid to 14.6 in September from 22.1 the prior month. Any figure above zero indicates more manufacturers see business improving rather than worsening. Economists had expected a decline to 17.

Elsewhere, the Conference Board's index of leading economic indicators climbed 0.4% in August, in line with estimates, following a revised 0.6% gain in July. That was the fifth consecutive monthly rise, indicating growth could accelerate in the second half of the year.

The components of the Philadelphia Fed index were slightly more upbeat than the overall figure. New orders rose to 19.3, the highest level since 1999, from 14.6 in August, while shipments stayed strong at 13.2, after a 16.3 reading the previous month.

As for the LEI components, four of the 10 indicators were higher, led by a larger difference between the yield on the 10-year note and the overnight rate banks charge on loans. An increase in the money supply was offset by a drop in consumer expectations.

"In a nutshell, we have good economic growth, but still some continuation of weakness in the labor market," Stanley said. "What the Fed and markets are looking for is improvement on either front, and we seem to be getting it, at least in activity."