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US jobless data suggests slowdown in job creation

The number of Americans claiming unemployment benefits for the first time fell only slightly last week.

This suggested that job growth in April will not improve much after March's disappointing performance.

Other data showed factory activity in the Mid-Atlantic region slowed sharply this month and home resales dropped for a second month in a row in March.

Economists viewed the string of weak reports as payback after an abnormally warm winter boosted activity and did not believe that the economy would suffer a repeat of 2011, when growth slowed down sharply in the first half of the year.

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 386,000, the Labor Department said. The previous week's data was revised to show 8,000 more applications received than previously reported. T

he four-week moving average for new claims, considered a better measure of labour market trends, rose to two and a half month high.

In a separate report, the Philadelphia Federal Reserve Bank said its Mid-Atlantic business activity index fell to 8.5 this month from 12.5 in March. A reading above zero indicates expansion in the region's manufacturing sector.

While factories in eastern Pennsylvania, southern New Jersey and Delaware received fewer orders and shipped out fewer goods than the prior month, they hired more workers. In addition, unfilled orders piled up a bit after falling in March.

First-quarter economic growth is seen between 2.5% and 3%, little changed from the fourth quarter's 3% annualised pace.

Some economists took a dim view of the data, which came ahead of the US Federal Reserve's policy meeting next week. No major policy announcement is expected, but economists say a third round of bond purchases or other quantitative easing later in the year cannot be ruled out, especially if labor market conditions weaken significantly.

Meanwhile, there was mixed signals for the US housing market, with a third report showing home resales dropped 2.6% to an annual rate of 4.48 million units last month. But the National Association of Realtors report showed the supply of unsold properties fell to 2.37 million and estate agents in some markets reported shortages of housing stock.

The average price for a second hand home rose to $163,800 in March, up 2.5% from a year ago. The months' supply was unchanged at 6.3 months, suggesting prices could still fall. House prices have fallen by about 32% from their peak at the end of 2005.