US jobless claims hit seven-year low

New applications for US unemployment benefits hit a seven-year low last week while consumer prices recorded their largest increase in 10 months in April, pointing to a firming economy.

The outlook was further brightened by other data on Thursday showing factory activity in New York state expanding at its quickest pace in nearly four years in May, although overall US industrial output slumped in April.

Initial claims for state unemployment benefits declined 24,000 to a seasonally adjusted 297,000 last week, the Labor Department said. It was the lowest reading since May 2007.

In a second report, the department said the Consumer Price Index increased 0.3 per cent last month as food prices rose for a fourth consecutive month and the cost of gasoline surged.

It was the biggest rise since June last year.