Jobless claims dipped more than expected in the latest week, but the job market's recovery is still going in fits and starts.
The number of Americans filing new claims for unemployment benefits fell last week, but an upward revision to the prior week's figure suggested the labor market recovery remained gradual.
Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 339,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 5,000 more applications received than previously reported. Economists polled by Reuters had expected first-time applications to fall to 330,000 last week.
The four-week moving average for new claims, which irons out week-to-week volatility, dropped 5,750 to 344,000. Lackluster domestic demand is preventing the labor market from generating stronger jobs growth that would decisively lower the unemployment rate.
Employers added 204,000 new jobs to the payrolls last month, but a 16-day government shutdown temporarily pushed the jobless rate up by a tenth of a percentage point to 7.3 percent, the Labor Department reported last week.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid was unchanged at 2.87 million in the week ended Nov. 2.
Separate data showed the U.S. trade deficit widened more than expected in September as imports rose to their highest level in almost a year, which could probably see third-quarter growth estimates trimmed.
The Commerce Department said the trade gap increased 8.0 percent to $41.8 billion, the largest since May. August's shortfall on the trade balance was revised slightly to $38.7 billion from the previously reported $38.8 billion. Economists polled by Reuters had expected the trade deficit to widen a bit to $39.0 billion in September.
When adjusted for inflation, the trade gap widened to $50.4 billion, the largest since May, from $47.4 billion the prior month. This measure goes into the calculation of gross domestic product.
The increase in the so-called real trade deficit in September suggested the government will probably lower its initial third-quarter GDP estimate. Trade contributed 0.31 percentage point to the economy's 2.8 percent annualized growth pace in the July-September quarter.
The three-month moving average of the trade deficit, which irons out month-to-to month volatility, increased to $39.7 billion in the three months to September from $37.3 billion in the prior period.
The trade deficit had held steady since plunging in June as both domestic and global demand remained sluggish.
Exports of goods and services slipped 0.2 percent to $188.9 billion in September. That was the third straight month of declines. Imports rose 1.2 percent to $230.7 billion, the highest level since November last year. Imports of automobiles and parts were the highest on record.
Additionally, U.S. nonfarm productivity rose less than expected in the third quarter and a drop in unit labor costs pointed to subdued wage inflation that should allow the Federal Reserve to maintain its massive monetary stimulus to the economy for a while.
Productivity rose at a 1.9 percent annual rate after increasing at a 1.8 percent pace in the second quarter, the Labor Department said. Productivity, which measures hourly output per worker, was unchanged compared to the same period last year.
First published November 14 2013, 5:44 AM