US jobless claims rise but July trade gap narrows
The number of Americans filing new claims for jobless benefits rose unexpectedly last week, further evidence of a weak labor market just hours before president Barack Obama unveils a plan on job creation in a major address to Congress.
A separate report showed a considerably narrower trade deficit for July, a positive signal for growth in the third quarter after a sluggish first half of the year.
Applications for unemployment benefits rose to 414,000 in the week ending September 3 from an upwardly revised 412,000 the prior week, the Labor Department has said. Wall Street analysts had been looking for a dip to 405,000.
“Jobless claims numbers have been stabilising in recent weeks. We’re probably seeing an economy that’s just growing slowly,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.
US stock index futures extended losses after the data, while Treasury debt prices held gains.
Excluding one week in early August, claims have held above 400,000 since early April. The Labor Department said there was no discernible effect from recent hurricanes and storms on the national figures this week.
The four-week moving average of claims, which smooths out volatility, rose to 414,750 from 411,000 the prior week.
Continuing claims eased to 3.72m from 3.75m in the week ended August 27, the latest available data. The number of total recipients on benefit rolls was 7.17m in the Aug. 20 week.
US employment growth ground to a halt in August, with zero net job creation raising fears of a new recession and putting pressure on the Federal Reserve to ease monetary policy further at its meeting later this month.
But in a respite from the negative news, the trade gap shrank to $44.8bn in July, Commerce Department data showed, down sharply from June’s $53.1bn deficit and much lower than forecasts around $51bn.
The 13.1 per cent decline was the biggest month-to-month percentage drop in the deficit since February 2009.
“The trade numbers are probably sufficiently better than expected to cause some upward revision in the GDP forecast,” said Pierre Ellis, senior economist at Decision Economics in New York.