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24 October 2013

U.S. jobless claims miss forecasts, trade deficit widens slightly today

Filed under: business — freezeru @ 16 h 38 min

Technical problems as California converted to a new computer system have distorted the claims data since September and a Labor Department analyst said claims from the backlog in California were still working their way through the system.

Economists, who had expected first-time applications to fall to 340,000 in the week ending October 19, say claims should drop back to levels consistent with a gradual labor market recovery once the backlog in California is cleared.

The four-week moving average for new claims, considered a better measure of labor market trends, rose 10,750 to 348,250.

Claims have generally been trending lower, suggesting employers are no longer laying off workers at an aggressive pace. However, hiring is being constrained by anemic domestic demand and uncertainty over fiscal policy. Employers added 148,000 new jobs in September.

“The lack of … progress on the jobs front is that we are not seeing dynamic hiring,” said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut. “The pace of layoffs is pretty restrained and consistent with lower unemployment. There are just not enough net jobs being added.”

A fight over the government budget and raising the debt limit partially shut down the federal government for 16 days this month. Economists estimated that shaved as much as 0.6 percentage point off annualized fourth-quarter gross domestic product growth.

The shutdown pushed up claims in recent weeks as furloughed nonfederal workers applied for benefits. Claims filed by federal employees fell 25,939 in the week ended October 12, the latest week for which more detailed data is available.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 8,000 to 2.87 million in the week ended October 12.

The so-called continuing claims data covered the October household survey week from which the unemployment rate is derived. Continuing claims increased between the September and October household surveys, suggesting a rise in the unemployment rate.

But the government shutdown which lasted through the survey period could have affected the gathering of responses and resulted in a smaller sample from which to construct the jobless rate.

Separately, the Commerce Department said on Thursday the trade gap nudged up 0.4 percent to $38.8 billion. July’s shortfall on the trade balance was revised to $38.6 billion from the previously reported $39.15 billion.

When adjusted for inflation, the trade gap was little changed at $47.3 billion from July. This measure goes into the calculation of GDP. Trade made no contribution to GDP growth in the second quarter and will likely offer only a modest lift to third-quarter output.

The economy grew at a 2.5 percent annual rate in the April-June quarter, stepping up from the first-quarter’s 1.1 percent pace. Third-quarter growth estimates are currently around 2 percent.

The three-month moving average of the trade deficit, which irons out month-to- month volatility, fell to $37.3 billion in the three months to August from $39.0 billion in the prior period.

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