Wall Street futures are down this morning as U.S. economic data show a significant decrease in initial weekly jobless claims, but lingering restraint on hiring.

The number of Americans filing new claims for unemployment benefits dropped again, pushing jobless claims to the lowest level in more than three years. The Labor Department is reporting today that the number of laid-off workers seeking jobless benefits fell by 6,000 last week to 336,000. The third straight weekly decline in jobless benefits is raising hopes that a lengthy stretch of layoffs is finally over.

However, the lack of significant new hiring has become a key issue in the current presidential race. Just 21,000 new jobs were created in February. The unemployment rate remained at 5.6% last month. The overall rate remained stable only because 392,000 Americans gave up looking for work and were no longer counted in the labour market.

In other economic news, the Commerce Department says that inflation at the wholesale level jumped by 0.6% in January, the biggest increase in three months. That reflected in part the largest jump in energy prices since last March at the start of the Iraq war. Outside of the volatile food and energy categories, the Producer Price Index rose a more moderate 0.3%.

In Canada, the inflation news is much improved. Statistics Canada is reporting that consumers paid 0.7% more for the goods and services in the Consumer Price Index basket last month than they did in February 2003. This is a significant drop from the 1.2% increase in January. It was also the smallest 12-month increase since December 2001, when the increase was 0.7% as well. The CPI rose only 0.2% on a monthly basis in February, compared with 0.7% in February 2003.

In a separate report, StatsCan says that foreign investors bought $5.5 billion of Canadian securities in January. They invested more in bonds than in stocks, while continuing to reduce their holdings of money market paper. Meanwhile, Canadian investors reduced their holdings of foreign stocks after three months of acquisitions, but continued to buy foreign bonds.

In business news, Hong Kong billionaire Victor Li is threatening to walk away from his company’s plan to invest $650 million in Air Canada if the airline’s unions don’t consider changes to employee pension plans.

Meanwhile in Europe, Frankfurt’s Xetra DAX Index fell 19.37 points, or 0.5%, to 3,877.42. Banking and insurance group Allianz declined 1.8% after it posted full-year results that included larger-than-expected charges for the restructuring of Dresdner. Commerzbank fell 2.2%

In London, FTSE 100 Share Index declined 0.7% to 4,425.7 following the release of retail data. Insurer Royal & Sun Alliance slipped 1.7%. In Paris, the CAC40 Index slipped 16.45 points, or 0.5%, to 3,639.59.

In Asia, markets closed mixed. Japan’s Nikkei Stock Average edged up 47.42 points, or 0.41%, to 11,484.28. In Hong Kong, the Hang Seng Index fell 159.53 points, or 1.2%, to 12,816.19.

Stock markets racked up solid gains on Wednesday. Toronto’s S&P/TSX composite index moved up 98.45 points to 8,601.72. Shares in Bombardier fell 35¢ at $6.44 after the transportation equipment giant announced it was cutting 6,600 jobs and closing seven European factories as it restructures its rail division. Bombardier also reported a $448 million loss for the fourth quarter, largely to help cover the $777 million restructuring.

New York’s Dow industrial average jumped 115.63 points to 10,300.3. The Nasdaq composite index added 33.67 points to 1,976.76. The S&P 500 index was up 13.05 at 1,123.75.