U.S. jobless claims rise, wholesale inventories drop

By Nancy Waitz

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits rose slightly last week, but wholesalers trimmed inventories in December, setting the stage for future growth, data on Thursday showed.

Separately, U.S. retailers said a blast of frigid weather and redemption of gift cards helped boost sales in January, with many retailers reporting sales above expectations.

According to the International Council of Shopping Centers, chain store sales rose a strong 3.7 percent in January from a year earlier, a pickup from December's 3.3 percent gain.

The world's largest retailer, Wal-Mart Stores Inc., (WMT.N), confirmed that sales at its U.S. stores open at least a year rose a better-than-expected 2.2 percent.

The generally upbeat economic news had little effect on financial markets. Stock prices closed down as financial shares slid on worries over mortgage lending, while prices for U.S. government debt rose after an auction of 30-year bonds was met with solid interest.

The dollar strengthened against the yen ahead of a meeting of finance ministers from the Group of Seven nations.

The retail results suggested the U.S. economy, which grew at a solid 3.5 percent annual rate in the fourth quarter, remained on solid ground, a view buttressed by a continued low level of new claims for jobless benefits.

The Labor Department said 311,000 workers filed initial claims for state unemployment insurance aid last week, up only slightly from the 308,000 submitted a week earlier. Economists had expected claims, a rough guide to the pace of layoffs, to rise to 313,000.

"The data are consistent with a still-tight labor market," Action Economics said in a research note.

LABOR MARKET "PRETTY HEALTHY"

A Labor Department analyst said there were no special factors behind last week's slight rise in unemployment insurance claims and that a tornado that struck central Florida on February 2 had no effect on the data.

The department said the number of people who remained on the benefit rolls after drawing an initial week of aid fell 54,000 to 2.49 million in the week ended January 27, the latest week for which figures are available.

"It suggests a pretty healthy labor market. It's a sign of stability. Employers are not seeing any major downturn in the economy and are confident to maintain the same level of job growth," said Jon Basile, economist for Credit Suisse in New York.

A separate report from the Commerce Department showed an unexpected fall in inventories at wholesalers in December.

The 0.5 percent decrease -- the biggest drop since May 2003 -- reflected slimmer auto and petroleum stocks and followed a 1.1 percent November gain.