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Unemployment aid falls to seven-month low; trade deficit reaches lowest point of the year
WASHINGTON (AP) ' The outlook for American jobs and trade looked a little brighter Thursday, despite growing uncertainty overseas.
The number of people who applied for unemployment benefits last week fell a seasonally adjusted 390,000, the Labor Department said Thursday. That's the fewest since April.
The U.S. trade deficit narrowed to $43.1 billion in September, its lowest point of the year, the Commerce Department said. Foreign sales of American-made autos, airplanes and heavy machinery pushed exports to an all-time high.
The data suggest layoffs are easing and the economy grew slightly better over the summer than the government had estimated a month ago.
Stock rose sharply one day after the market tumbled over concerns that Europe's debt crisis could worsen.
The Dow Jones industrial average gained more than 140 points in the first half hour of trading. Broader indexes also increased.
The reports "are modestly strong relative to expectations--encouraging confidence that the economy is gaining a bit of momentum," said Pierre Ellis, an analyst at Decision Economics.
Weekly applications for unemployment benefits have declined in three of the past four weeks, the Labor Department said. The four-week average, a less volatile measure, fell to 400,000, also the lowest point since April.
The downward trend in applications suggests businesses are laying off fewer workers. Still, applications need to consistently drop below 375,000 to signal sustained job gains. They haven't been at that level since February.
"The labor market is still weak and quite stagnant but there are hopeful signs of some modest improvement," said Steve Wood, chief economist at Insight Economics.
In September, exports increased 1.4 percent to a record $180.4 billion, reflecting a big increase in shipments of U.S. made autos and auto parts. Imports were up a smaller 0.4 percent to $223.5 billion. Oil imports slowed after huge gains earlier in the year.
The deficit has narrowed for the last three months.
Paul Dales, senior U.S. economist at Capital Economics, said the September decline could boost growth in the July-September quarter to an annual rate of 2.8 percent, up from the government's initial estimate of 2.5 percent.
Still, the Europe's debt crisis could push the region into a recession next year. That could reduce demand for U.S. exports and slow growth.
A higher deficit acts as a drag on economic growth because it means fewer jobs for American workers.
The outlook for hiring has been mixed in recent months. The economy added only 80,000 jobs in October, the fewest in four months.
But the government also said last week that employers added more jobs in August and September than it had initially reported, and the unemployment rate dipped to 9 percent.
A separate report this week showed that employers advertised more jobs in September than at any other point in the past three years. That's a positive sign for future hiring, since most companies typically take one to three months to fill vacant positions.
The unemployment rate has been stuck near 9 percent for more than two years, and the Federal Reserve said last week that it is not expected to fall significantly through the end of next year.
The number of people receiving unemployment aid under regular state programs dropped 92,000 to 3.62 million in the week that ended Oct. 29. That doesn't include more than 3 million who are receiving extended benefits under an emergency program paid for by the federal government.
All told, more than 6.8 million people received benefits in the week that ended Oct. 22, the last period for which inclusive figures are available.