US jobless claims edge up; current account deficit falls
The number of Americans filing for unemployment benefits rose from a five-month low last week, but remained below a level associated with a strengthening labor market. Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 265,000 for the week ended March 12, the Labor Department
Washington: The number of Americans filing for unemployment benefits rose from a five-month low last week, but remained below a level associated with a strengthening labor market. Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 265,000 for the week ended March 12, the Labor Department said on Thursday. The prior week`s claims were revised to show 1,000 fewer applications received than previously reported.
Claims have now been below 300,000, a threshold associated with healthy labor market conditions, for 54 weeks, the longest stretch since 1973.
Labor market resilience has helped to ease fears the economy could be heading into a recession, which triggered a recent sharp stock market sell-off and subsequent tightening in financial market conditions. That could keep the Federal Reserve on course to gradually raise interest rates this year.
The US central bank held rates steady on Wednesday and Fed Chair Janet Yellen said in a press conference that "the labor market continues to strengthen" and that economic growth appeared to have picked up from the fourth quarter`s "modest" pace.
New projections from Fed policymakers showed they expected two quarter-point rate increases by the end of this year, half the number seen in December.
U.S. stock index futures were trading lower on Thursday and the dollar fell against a basket of currencies. Prices for U.S. Treasuries rose.
CURRENT ACCOUNT IMPROVEMENT
Economists polled by Reuters had forecast jobless claims rising to 268,000 in the latest week. A Labor Department analyst said there were no special factors influencing last week`s claims data and no states had been estimated.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, edged up 750 to 268,000 last week.
The claims data covered the survey period for March nonfarm payrolls. The four-week average of claims fell 5,250 between the February and March survey periods, suggesting further payrolls gains. The labor market added 242,000 jobs in February.
The claims report also showed the number of people still receiving benefits after an initial week of aid rose 8,000 to 2.24 million in the week ended March 5. The four-week average of the so-called continuing claims fell 9,250 to 2.24 million.
In a second report, the Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, fell 3.6 percent to $125.3 billion in the fourth quarter. The improvement, however, is unlikely to be sustained as a strong dollar continues to undercut exports of goods.
For 2015, the current account deficit totaled $484.1 billion, the largest since 2008.
The fourth-quarter current account deficit represented 2.8 percent of gross domestic product, down from 2.9 percent in the July-September quarter. It represented 2.7 percent of GDP for 2015, the largest since 2012 and up from 2.2 percent in 2014.
The dollar gained 20 percent versus the currencies of the United States` main trading partners between June 2014 and December 2015, undermining exports. Goods exports fell 3.4 percent to $366.7 billion in the fourth quarter.