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U.S. economy showing signs of warming up

Construction proceeds on a home in Yaphank last

Construction proceeds on a home in Yaphank last month. The Conference Board research group reports the index of leading indicators rose in February, led by a jump in building permits. Credit: Danielle Finkelstein

Fewer Americans are seeking jobless benefits in March, manufacturing in some areas is rebounding and a gauge of the economy's prospects climbed more than forecast in February, signs U.S. growth will pick up as temperatures warm.

There were 320,000 claims for unemployment payments filed in the week ended March 15, following 315,000 in the prior week, the lowest back-to-back readings since late November, according to the Labor Department.

Factory output in the Federal Reserve Bank of Philadelphia region grew at a faster pace, while gains in building permits and easier credit conditions boosted the index of leading indicators, other figures showed.

"The numbers will look better once we get past the first quarter," said Robert Dye, chief economist at Comerica Inc. in Dallas. "We expect a spring thaw after the brutal winter. Job growth will reestablish itself after the weather turns."

The data came a day after the Fed decided to trim monthly bond purchases by another $10 billion beginning in April as the economy improves, and some policymakers boosted forecasts for how much the benchmark interest rate will rise next year.

There is "sufficient underlying strength in the broader economy to support ongoing improvement in labor-market conditions," Fed officials said Wednesday.

"Claims remain extremely encouraging," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla. "They're signaling that the net slowing in payroll gains in the last few months is weather related and temporary, and we're due for some catch-up."

Manufacturing is also showing signs of snapping back. The Philadelphia Fed's factory index rose to 9 this month from minus 6.3 in February, the branch of the central bank reported. Readings greater than zero signal growth; the area covers eastern Pennsylvania, southern New Jersey and Delaware.

A report from The Conference Board, a New York-based research group, showed the index of leading indicators, a gauge of the outlook for the next three to six months, climbed 0.5 percent in February, the biggest gain since November, after a 0.1 percent advance the prior month.

Five of the 10 indicators in the leading index contributed to the increase, led by a jump in building permits, an improvement in the group's credit measure and the spread between short- and long-term interest rates. Weaker consumer confidence limited the gain.

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