Jobless claims rise, but labor recovery grinds on
WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits rose last week, although the level still pointed to further healing in the labor market.
Other data on Thursday showed prices for U.S. imports and exports fell in June for the fourth straight month, hit by cooler economic growth worldwide.
Initial claims for state unemployment benefits increased by 16,000 to a seasonally adjusted 360,000, the Labor Department said.
Analysts had expected a small decline in new claims. The reading, however, was likely clouded by seasonal factors.
The Labor Department can have a tough time seasonally adjusting claims in early July because many factories shut down during the summer for retooling, but the scheduling for the shutdowns varies from year to year.
"Claims will be wild for the next couple of weeks," said Ian Shepherdson, an economist at Pantheon Macroeconomics.
The four-week moving average of new claims, which smooths out some seasonal volatility, increased by a more modest 6,000 to 351,750.
Even with the increase, the number of layoffs remains in the range of levels seen over the last year and is consistent with a continued drop in the unemployment rate, which has fallen more than half a percentage point since June 2012.
At the same time, measures of economic output are pointing to much more lackluster growth. The economy expanded at a 1.8 percent annual rate in the first quarter and many economists think a wave of federal budget cuts could slow growth to roughly half that pace in the April-June period.
If jobless claims keep rising in July, that might signal a slowdown in hiring during the month, said Joshua Dennerlein, an economist at Bank of America Merrill Lynch in New York.
"The labor market has been doing pretty well, but ... growth has slowed so the two have to converge," Dennerlein said.
The Labor Department said last week the U.S. economy added a 195,000 jobs in June, which was stronger than analysts had expected.
Investors appeared largely unmoved by the data. Prices for U.S. stocks and government debt rose a day after comments by U.S. Federal Reserve Chairman Ben Bernanke indicated the central bank was unlikely to scale back its stimulus measures earlier than expected.
The Labor Department said in a separate report that export prices fell 0.1 percent last month, matching the median forecast of a Reuters poll.
The drop probably reflects weakness in global demand, which has been hit by Europe's debt crisis and slowing growth in China.
Import prices slipped 0.2 percent last month, dragged down by another month of declining costs outside of the fuels category. Petroleum prices rose 0.2 percent. Economists polled by Reuters had expected overall import prices to be unchanged last month.
Prices for both imports and exports have fallen every month since March, the longest such streak since 2008 when the world was mired in a financial crisis.
The drop in prices last month for imported cars and other consumer goods could help some U.S. consumers.
However, some economists are worried that weak demand could raise the risk of deflation, which entails a spiral of falling prices and wages that is difficult for central banks to fight.
Gennadiy Goldberg, an interest rate strategist at TD Securities in New York, said a low rate of inflation will be a factor pushing the Fed to keep interest rates low.
"There is nothing in the international price data that will offset what will remain a disinflationary backdrop," Goldberg said.