May 11, 2012, 12.47 PM | Source: Reuters
The number of Americans submitting new applications for jobless benefits edged down last week, easing concerns the labor market was deteriorating after April's weak employment growth.
While the claims data indicated the economy remained on a moderate growth path, a report from the Commerce Department showing a widening in the trade deficit in March suggested economic growth was much slower in the first quarter than initially believed.
New claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 367,000, the Labor Department said on Thursday. The prior week's figure was revised up to 368,000 from the previously reported 365,000.
Economists polled by Reuters had forecast claims inching up to 369,000 last week. The four-week moving average for new claims, considered a better measure of labor market trends, fell 5,250 to 379,000.
"It looks like the (jobless claims) numbers are reverting to the declining trend that got interrupted briefly," Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Separately, the trade gap grew 14.1% to USD 51.8 billion, the biggest jump in nearly a year, even though exports also hit a record high.
Economists polled by Reuters had expected the trade gap to widen to about USD 50 billion.
The weak trade balance number could cause the government to lower its first-quarter growth estimate to below an annual pace of 2% from 2.2%, according to economists.
US stock index futures briefly edged higher on Thursday after the data, while the US Treasury 30-year bond briefly extended price losses. The dollar pared losses against the euro.
Coming on the heels of April's sluggish employment gains, the claims data could calm fears the labor market was stagnating.
Companies added a meager 115,000 new jobs to their payrolls in April, the fewest in six months, the government reported last Friday.
Most economists have viewed the pull-back in job creation as payback after the weather-induced gains in the previous months and believe the underlying pace of payrolls growth is around 175,000 - the monthly average for the past three months.
Even Federal Reserve Chairman Ben Bernanke last month said an unseasonably warm winter had probably brought forward some of the hiring by companies, artificially boosting payrolls in January and February.
"They (jobless claims) have simmered down after the noises we had earlier. This shows we have moderate job growth. They're consistent with monthly job payroll growing at 150,000 to 180,000," said Scott Brown, Chief Economist, Raymond James in St. Petersburg, Florida.
The number of people still receiving benefits under regular state programs after an initial week of aid dropped 61,000 to 3.23 million in the week ended April 28. That was the lowest level since July 2008.
The number of Americans on emergency unemployment benefits fell 36,275 to 2.69 million in the week ended April 21, the latest week for which data is available. The number of people on extended benefits slipped 4,304 to 350,579.
Some states are losing their eligibility for extended benefits and reducing the duration of emergency compensation. That could artificially push down the unemployment rate as people dropping off the benefits rolls give up the hunt for work.
A drop in the share of working-age Americans either with a job or looking for one to near a 30-1/2-year low pushed the jobless rate down to 8.1% last month from 8.2% in March.
A total of 6.42 million people were claiming unemployment benefits during the week ending April 21 under all programs, down 174,529 from the prior week.