NewUS jobs and inflation data point to sustained growth and bolsters bets on rate increase by the Fed

The number of Americans filing for unemployment benefits unexpectedly held steady near a 43-year low last week, pointing to further momentum in the labour market after job growth surged in June.

Another report on Thursday showed producer prices recorded their biggest gain in a year in June on rising costs for energy products and services. The signs of sustained strength in the economy, together with a US stock market rally, could allow the Federal Reserve to raise interest rates later this year.

“The days of falling prices are pretty much over and the labour market is strengthening, which raises the question: Is anyone at the Fed paying attention?” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

“Fed members, who fear anything that is not normal and hide from it, may want to peak out from under their rocks.”

Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 254,000 for the week ended July 9, the Labor Department said. Claims are near the 43-year low of 248,000 touched in mid-April.

Economists had forecast first-time applications for jobless benefits rising to 265,000 in the latest week. Claims have now been below 300,000, a threshold associated with a healthy labour market, for 71 straight weeks, the longest stretch since 1973.