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Unemployment rises again

Birthpangs 2012/04/12 14:49:16

The number of Americans filing for jobless aid rose last week to the highest level since January, a development that could raise fears the labor market recovery was stalling after job creation slowed in March.











Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 380,000, the Labor Department said on Thursday, defying economists' expectations for a drop to 355,000.


The four-week moving average for new claims, considered a better measure of labor market trends, rose 4,250 to 368,500.


Some economists blamed the Easter holidays for the spike in claims and expected applications to trend lower in coming weeks.


"It's very difficult to know the extent to which that's driven by seasonal effects from Easter or not," said Eric Green, chief economist at TD Securities in New York.


"This is not a game changer, this does not confirm the weakness in the report we saw last Friday. We suspect that much of the increase was due to seasonal issues and we would therefore expect it to drift lower."




The claims data comes in the wake of Friday's disappointing employment report for March, which showed the economy created 120,000 new jobs, the smallest amount since October.


Despite the rise in claims last week, both first-time applications for unemployment aid and the four-week average held below the 400,000 mark, implying steady job gains.


There was good news in other data on Thursday, with producer prices flat in March and the trade deficit narrowing sharply in February.


The U.S. trade deficit shrank 12.4 percent to $46 billion in February, the biggest month-to-month decline since May 2009, the Commerce Department said, as exports hit a record high.


That could prompt economists to raise their estimates for first-quarter gross domestic product.


U.S. producer prices were unchanged last month after advancing 0.4 percent in February.


Economists polled by Reuters had expected prices at farms, factories and refineries to rise 0.3 percent.


Wholesale prices excluding volatile food and energy costs rose 0.3 percent after February's 0.2 percent gain.


That was a touch above economists' expectations for a 0.2 percent advance and marked the fifth successive month of increases in core PPI.


Over one-third of the rise in core PPI was attributed to prices for light motor trucks. Higher costs for passenger cars, soaps and detergents also contributed to the advance in core PPI.


However, manufacturers have limited scope to pass on these increased costs to consumers given the still considerable slack in the economy.


Overall producer prices were held back by a 2.0 percent fall in gasoline, the largest decline since October, after a 4.3 percent jump in February. That offset a 0.2 percent rise in food prices, which halted three straight months of declines.


However, gasoline prices rose 7.5 percent, when seasonal factors are excluded.


In the 12 months to March, wholesale prices increased 2.8 percent, the smallest increase since June 2010, after advancing 3.3 percent in February.


Outside food and energy, producer prices were pushed up by light motor trucks prices, which rebounded 0.7 percent after falling 0.4 percent in February. Passenger car prices rose 0.8 percent after edging up 0.1 percent the prior month.

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