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US jobless claims fall 12,000 in Aug; trade deficit declines 2.7%

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 260,000 for the week ended Sept 30

Reuters  |  Washington 

US jobless claims fall 12,000 in Aug; trade deficit declines 2.7%

The number of Americans filing for unemployment benefits fell more than expected last week, but the continued impact of Hurricanes Harvey and Irma on the data made it difficult to get a clear picture of the labour market.

Other data on Thursday pointed to underlying economic strength despite the weather-related disruptions. The narrowed in August as of goods and services rose to more than a 2-1/2-year high, tempering expectations of a sharp slowdown in third-quarter growth due to the storms.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 260,000 for the week ended Sept. 30, the Labor Department said.

Harvey and Irma along with Hurricane Maria affected claims for Texas, Florida, Georgia, Puerto Rico and the Virgin Islands, a Labor Department official said. Economists had forecast claims falling to 265,000 in the latest week.

Claims shot up from a low of 236,000 in late August, hitting 298,000 at the start of September. As a result, Harvey and Irma are expected to cut into job growth in September.

According to a Reuters survey of economists, the Labor Department's closely watched employment report on Friday will likely show that nonfarm payrolls increased by 90,000 jobs last month after rising by 156,000 in August.

The labor market disruptions are expected to be temporary, with the job market generally remaining strong.

Claims have now been below the 300,000 threshold, which is associated with a robust labor market, for 135 consecutive weeks. That is the longest such stretch since 1970, when the labor market was smaller.

Prices of U.S. Treasuries were mixed in early morning trading while U.S. stock index futures were slightly higher. The dollar rose against a basket of currencies.

US-CHINA WIDENS

In a separate report on Thursday, the Commerce Department said the trade gap declined 2.7 percent to $42.4 billion, the smallest since September 2016.

The department said the effects of Harvey, Irma and Maria would be "embedded in source data" for trade, and the impact of the hurricanes will likely be "reflected in subsequent trade reports until normal trade activities resume in affected areas."

Economists had forecast the trade shortfall narrowing to $42.7 billion in August. When adjusted for inflation, the was little changed at $61.8 billion.

The so-called real average for July and August was below the second-quarter average of $62.4 billion.

That suggests trade could contribute to gross domestic product in the third quarter and help to soften the economic blow of the hurricanes. The storms are expected to cut at least six-tenths of a percentage point from economic growth in the third quarter. Trade added two-tenths of a percentage point to the second quarter's 3.1 percent annualized growth pace.

In August, of goods and services increased 0.4 percent to $195.3 billion, the highest level since December 2014. Goods were the highest since April 2015. There were increases in of consumer and capital goods.

Fuel exports, however, fell by $0.7 billion. Food also declined. to China increased 8.8 percent.

Imports of goods and services dipped 0.1 percent to $237.7 billion in August. Imports of industrial supplies and materials were the lowest since November 2016. There were also declines in capital goods imports. Motor vehicle imports, however, increased in August.

Imports of goods from China were up 5.1 percent to a record high. The politically sensitive U.S.-China rose 4.0 percent to $34.9 billion in August, the highest level since September 2015.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, October 05 2017. 20:30 IST
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