Several recent economic indicators show that the recovery is gaining strength, but still isn't growing fast enough to bring down the unemployment rate.

The government will release the April jobs report on Friday. Analysts forecast that it will show the jobless rate remained stuck at 9.7% for the fourth straight month, even as employers add 200,000 jobs. As many as half those new jobs may be temporary Census workers carrying out the 2010 Census, economists say.

The Labor Department said today that initial claims for unemployment insurance fell by 7,000 to a seasonally adjusted 444,000. That's above economists' forecasts of 440,000, according to Thomson Reuters. Layoffs have dropped back to pre-recession levels and employers have slowly resumed hiring as the economy recovers from the worst recession since the 1930s.

That has brought claims down from a peak of 651,000 in March 2009. But many economists are concerned that claims haven't fallen faster this year. Instead, they have fluctuated around 450,000. Overall, the economy expanded at a 3.2% pace in the January-to-March quarter, according to the Commerce Department, the third straight quarter of growth.

One factor keeping the unemployment rate high is that thousands of people have re-entered the labor force after giving up on job hunts during the recession. When jobless people don't look for work, they aren't counted in the official unemployment rate.

Another factor is high productivity growth. In a separate report, the Labor Department said productivity grew by 3.6% in the first three months of this year, much more than forecast.

Higher productivity helps boost living standards in the long run, as more productive workers can demand higher wages. But it also enables employers to delay hiring and increase output from their existing workforces.

New reports released today by retailers also were encouraging. Discounters such as Costco Wholesale Corp. and BJ's Wholesale Club Inc. emerged as the biggest winners. Limited Brands Inc. and Macy's Inc. had solid gains. Teen merchants including Wet Seal Inc. and Abercrombie & Fitch Co. continue to struggle with declines.

The figures are based on revenue at stores open at least a year and are considered a key indicator of a retailer's health because they exclude growth at stores that open or close during the year.

Ken Perkins, president of RetailMetrics, a research firm, said while the signs are positive the consumer spending recovery is still likely to be slow amid persistent high unemployment and tight credit.

Overall, employers added 162,000 jobs in March, the most in three years. But it takes about 125,000 new jobs every month just to keep up with population growth. New jobs need to be added at a faster pace to bring down the unemployment rate.

Still, the positive economic reports are piling up. A trade group of purchasing executives said Monday that the manufacturing sector expanded in April at its fastest pace in nearly six years. The group, the Institute for Supply Management, also said the service sector also grew in April, the fourth straight month of growth.

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