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WRAPUP 2-U.S. jobless claims rise, but labor recovery grinds on
July 11, 2013 / 1:11 PM / in 4 years

WRAPUP 2-U.S. jobless claims rise, but labor recovery grinds on

* New jobless claims rise 16,000 in latest week
    * Claims reading likely clouded by seasonal factors
    * Still points to labor market recovery
    * Import, export prices decline for fourth straight month

    By Jason Lange
    WASHINGTON, July 11 (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
    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
    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
    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
    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
could raise the risk of deflation, which entails a spiral of
falling prices and wages that is difficult for central banks to
    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

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