RSS
 Add News     Print  
Article List
US jobless claims fall, weak exports push up trade deficit Productivity grows at 3.2 pct rate in Q4

WASHINGTON, Feb 6, (RTRS): The number of Americans filing new claims for unemployment benefits fell more than expected last week, in a boost to the labor market outlook and the broader economy. Other data on Thursday showed a weakening in exports in December, which if it extends to January could see trade being a drag on growth in the first quarter after it helped to buoy the economy in the last three months of 2013. “The underlying economic trend is still positive,” said Craig Dismuke, chief economic strategist at Vining Sparks in Memphis. Initial claims for state unemployment benefits declined 20,000 to a seasonally adjusted 331,000, the Labor Department said. That was a bit lower than economists’ expectations for a fall to 335,000 in the week ended Feb 1.

The data has no bearing on January’s employment report, which will be released on Friday, as it falls outside the survey period. Still, it bodes well for the jobs market. The dollar extended gains against the euro and was little changed against the yen after the claims data, while US Treasury debt prices fell and stock index futures rose. Hiring is expected to have accelerated in January after being held down by unseasonably cold weather the prior month. Nonfarm payrolls likely increased 185,000 last month, up from December’s tepid 74,000 count, according to a Reuters poll of economists. The unemployment rate is forecast to hold steady at a five-year low of 6.7 percent. That would be confirmation that the economy continued to expanded after robust growth in the second half of 2013, which was driven by consumer spending, inventory accumulation and trade.

Economy
Support But economy could lose some support from trade. In a separate report, the Commerce Department said the trade deficit increased 12 percent to $38.7 billion in December as exports recorded their largest decline since October 2012. When adjusted for inflation, the trade gap rose to $49.5 billion in December from $45.0 billion the prior month. The government in its first estimate of fourth-quarter GDP last week cited trade as one of the key contributors to the economy’s 3.2 percent annual growth pace during the period. Trade added 1.33 percentage points to fourth-quarter GDP growth as exports expanded at their quickest pace in three years and imports slowed. There are, however, doubts that the robust export growth pace can be sustained in light of slowing growth in markets like China. December’s fall in exports could bolster that view. In December, exports dropped 1.8 percent to $191.3 billion. However, petroleum exports hit a record high in December.

Imports edged up 0.3 percent to $230.0 billion in December. Imports of consumer goods hit a record high, but the impact was limited by a fall in the average price of imported crude oil, which hit its lowest level since February 2011. The economy’s solid performance in the fourth quarter was mirrored by sturdy gains in productivity. In another report, the Labor Department said productivity rose at a 3.2 percent annual rate after increasing at a 3.6 percent pace in the third quarter. Economists polled by Reuters had forecast productivity, which measures hourly output per worker, rising at a 2.5 percent rate in the last three months of 2013.

Still, the underlying trend remained soft, with productivity increasing 1.7 percent compared to the same period in 2012. For all of 2013, productivity increased 0.6 percent. That was the smallest gain since 2011 and compared to a 1.5 percent rise in 2012. Unit labor costs -  a gauge of the labor-related cost for any given unit of output -  fell at a 1.6 percent rate in the fourth quarter, showing weak wage-related inflation pressures in the economy. Unit labor costs fell at a 2.0 percent rate in the third quarter. Economists polled by Reuters had expected unit labor costs to fall at a 0.5 percent pace in the fourth quarter. Labor costs were down 1.3 percent from the year-earlier period. They were up 1.0 percent in 2013, the weakest reading since 2010.





 

Read By: 1314
Comments: 0
Rated:

Comments
You must login to add comments ...
About Us   |   RSS   |   Contact Us   |   Feedback   |   Advertise With Us