New jobless claims fall to 4-month low
Source: Agencies |
August 12, 2011, Friday
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Print Edition
Print Edition
THE number of Americans claiming new jobless benefits dropped to a four-month low last week, a sliver of hope for an economy that has been battered by a credit rating downgrade and falling share prices.
Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said yesterday, the lowest level since the week ended April 2. That was below economists' expectations for a reading of 400,000.
"This could suggest that labor markets aren't rapidly deteriorating, even if it still doesn't shed much light on what's happening on the hiring side of the equation," said Sean Incremona, an economist at 4CAST in New York.
But the optimism generated by the claims report was dampened somewhat by a surprise widening in the trade deficit in June. The June trade deficit jumped to US$53.1 billion, the largest since October 2008, from US$50.8 billion in May.
The wider trade gap could cause second-quarter's 1.3 percent annual growth pace to be revised lower.
The Federal Reserve said on Tuesday economic growth was considerably weaker than expected and unemployment would fall only gradually. The United States central bank promised to keep interest rates near zero until at least mid-2013.
Hiring accelerated in July after abruptly slowing in the past two months. But there are worries a sharp sell-off in stocks and a nasty fight between Democrats and Republicans over raising the government's debt ceiling could dampen employers' enthusiasm to hire new workers.
"We're looking toward a period of financial instability ... and that probably will inspire a lot of caution and nowadays, caution translates into layoffs," said Pierre Ellis, a senior economist at Decision Economics in New York.
Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said yesterday, the lowest level since the week ended April 2. That was below economists' expectations for a reading of 400,000.
"This could suggest that labor markets aren't rapidly deteriorating, even if it still doesn't shed much light on what's happening on the hiring side of the equation," said Sean Incremona, an economist at 4CAST in New York.
But the optimism generated by the claims report was dampened somewhat by a surprise widening in the trade deficit in June. The June trade deficit jumped to US$53.1 billion, the largest since October 2008, from US$50.8 billion in May.
The wider trade gap could cause second-quarter's 1.3 percent annual growth pace to be revised lower.
The Federal Reserve said on Tuesday economic growth was considerably weaker than expected and unemployment would fall only gradually. The United States central bank promised to keep interest rates near zero until at least mid-2013.
Hiring accelerated in July after abruptly slowing in the past two months. But there are worries a sharp sell-off in stocks and a nasty fight between Democrats and Republicans over raising the government's debt ceiling could dampen employers' enthusiasm to hire new workers.
"We're looking toward a period of financial instability ... and that probably will inspire a lot of caution and nowadays, caution translates into layoffs," said Pierre Ellis, a senior economist at Decision Economics in New York.
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