WASHINGTON - The number of U.S. workers filing new applications for unemployment benefits fell slightly less than expected last week, hinting at a slow labor market recovery.
Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 462,000 from 468,000 the prior week, the Labor Department said on Thursday. That was a touch less than market expectations for 460,000.
Separately, the Commerce Department said the nation's trade gap shrank 6.6 percent to $37.3 billion as oil imports fell to their lowest since February 1999. However, U.S. exports also declined. Analysts had expected the deficit to widen to $41.0 billion from $39.9 billion in December.
It (claims) came in within expectations, but it's not consistent with anything that indicates the labor market has turned the corner, said David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto.
The U.S. dollar fell against the euro on the better-than-expected trade data, while stock index futures and Treasury debt prices held losses.
A Labor Department official said there were no special factors affecting the jobless claims data. The four-week moving average of new claims, which irons out week-to-week volatility, rose 5,000 to 475,500, the highest since late November.
While both claims and the four-week average remain at uncomfortably high levels, the labor market is showing signs of stabilizing. Government data this week showed jobs opened up in January at the fastest pace in nearly a year and other employment indicators continue to point to an improving trend.
Restoring growth to the labor market, hard hit by the most painful economic downturn since the 1930s, is crucial to sustaining the economy's recovery when the boost from government stimulus and a turn in the inventory cycle wanes.
Analysts were concerned that the narrowing of the trade balance also reflected a drop in exports.
It's not so great in that it shows weakness in imports and exports. It also could mean that the foreign growth is not providing quite as positive an impulse as we had thought previously, said Zach Pandl, U.S. economist at Nomura Securities in New York.
The economy has lost 8.4 million jobs since the start of the downturn in December 2007 and there is rising optimism that payroll jobs growth could start as early as March.
Officials from the Federal Reserve meet next week and are expected to hold overnight interest rates in a zero to 0.25 percent range, and maintain a pledge to keep them ultra low for an extended period.
Analysts reckon the U.S. central bank will not raise benchmark borrowing rate until the unemployment rate peaks, and starts falling. The jobless rate has held steady at 9.7 percent for two straight months.
The number of people still receiving benefits after an initial week of aid rose 37,000 to 4.56 million in the week ended February 27, the Labor Department said. Analysts had expected so-called continuing claims to hold steady at 4.49 million.
The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was unchanged at 3.5 percent in the week ended February 27. The number of people on extended unemployment benefits fell in the week ended February 20.
(Reporting by Lucia Mutikani and Doug palmer; Editing by Neil Stempleman)