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U.S. jobs, trade data supports modest economic growth

WASHINGTON: The number of Americans filing new claims for jobless benefits fell last week while the trade deficit in June was the smallest in one and half years – hopeful signs for the struggling economy.

Claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 361,000, the Labor Department said Thursday, suggesting a modest improvement in the jobs market.

Economists polled by Reuters had forecast claims rising to 370,000 last week. The four-week moving average of new claims, a better measure of labor market trends, rose 2,250 to 368,250.

A second report from the Commerce Department showed the shortfall on the trade balance narrowed 10.7 percent to $42.9 billion, the smallest since December 2010, as low oil prices curbed imports.

That was below economists’ expectations for a $47.5 billion deficit. The petroleum import bill fell as the average price per barrel of crude oil dropped by the most since January 2009.

Paul Dales, senior economist at Capital Economics in Toronto, said the jobless claims data suggested labor market conditions were “fairly stable.”

“The pickup in jobs growth in July may therefore be sustained in August,” he said.

Nonfarm payrolls increased 163,000 in July, the most in five months, after three months of gains below 100,000. But the unemployment rate rose by a tenth of a percentage point to 8.3 percent.

Last week’s report was the first in several weeks not affected by auto plant shutdowns, which caused wide swings in claims in July, making it difficult to get a clean read of the jobs market.

Worries of major government spending cuts and higher taxes scheduled to kick in at the turn of the year and the eurozone’s ongoing debt crisis were making companies cautious about hiring new workers, economists say.

 
A version of this article appeared in the print edition of The Daily Star on August 10, 2012, on page 6.

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