Reuters and AFP
WASHINGTON — The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting a pick-up in the labor market recovery and economic growth.
But the growth outlook was dimmed somewhat by another report on Thursday showing a widening in the trade deficit in January as imports rebounded. Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 340,000, declining for a second straight week, the Labor Department said, and confounding economists’ expectations for a rise to 355,000. The four-week moving average for new claims, a better measure of labor market trends, also fell 7,000 to 348,750 — the lowest level since March 2008 — pointing to some firming in underlying labor market conditions.
“It’s once again supporting the thought that the economic recovery is strengthening,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York. US$44.45 bil. Shortfall In a separate report, the Commerce Department said the trade gap rose to US$44.45 billion in January from a shortfall of US$38.14 billion in December.
Exports fell by US$2.2 billion to $184.5 billion, led by declines in exports industrial supplies and materials as the United States beefed up its imports of those goods. Total imports rose about US$4.1 billion to US$228.9 billion. The increase in the trade shortfall came in larger than the average analyst estimate of US$43.0 billion. U.S. government bond prices fell on the claims data, while the euro climbed to session peaks against the dollar.
A Labor Department analyst said no states had been estimated and there were no special factors influencing the report.
The claims data has no bearing on February’s employment report, due on Friday, as it falls outside the survey period. According to a Reuters survey of economists, employers probably added 160,000 jobs to their payrolls last month, a small pick-up up from January’s 157,000 count. That would just be enough to hold the jobless rate steady at 7.9 percent.
Economists say job gains of at least 250,000 per month over a sustained period are needed to significantly dent the ranks of the unemployed. Job growth averaged 200,000 in the last three months. While layoffs have subsided, companies are not in a hurry to step up hiring as domestic demand remains lackluster. Claims remain tucked in the low end of a 330,000 to 375,000 range for this year.
“The slow, steady improvement in claims is a good reflection of a better business environment,” said Joseph Trevisani, chief market strategist at Worldwidemarkets in Woodcliff Lake, New Jersey. “It has taken the jobless numbers a very long time to get to the point where historically managers begin to hire.”
Planned Layoffs Rise A third report showed planned layoffs at U.S. companies rose for the second month in a row in February as the financial sector cut the most employees in over a year. Employers announced 55,356 planned job cuts last month, up nearly 37 percent from 40,430 in January, according to the report from consultants Challenger, Gray & Christmas, Inc.