Thursday, April 09, 2009

US Jobless Rolls Surge to a Record Level in March

U.S. jobless claims ease in latest week

Thu Apr 9, 2009 9:40am EDT
By Lucia Mutikani

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless aid fell last week, but the number of people on unemployment rolls surged to a record in March, data showed on Thursday, suggesting the labor market's decline has not yet hit bottom.

In another snapshot of the U.S. economy, the country's trade deficit shrank 28.3 percent in February to its smallest since November 1999 as imports tumbled and exports managed to grow slightly.

Initial claims for state unemployment insurance benefits fell 20,000 to a seasonally adjusted 654,000 last week, from an upwardly revised 674,000 the week before, the Labor Department said.

"Things are still really bad. I'm still very pessimistic about the prospects of any enduring recovery. The pessimism creeps in because of the continued claims figure," said T.J. Marta, chief market strategist at Marta on the Markets in Scotch Plains, New Jersey.

U.S. equity index futures extended gains after the report, while longer dated U.S. government bond prices deepened losses.

Initial claims are being closely watched for clues as to when the recession, now in its 16th month, will end.

Recent economic data has been somewhat stronger than expected, indicating the steep decline in economic activity might be losing some momentum, but rising unemployment remains an obstacle to recovery.


The number of people staying on benefit rolls after collecting an initial week of aid jumped 95,000 to 5.84 million in the week ended March 28, the latest week for which the data is available, from an upwardly revised 5.75 million the previous week.

This was the highest on record and lifted the insured unemployment rate to 4.4 percent, the highest since a matching rate in April 1983, from 4.3 percent the prior week.

Continuing claims have hit record highs for 11 consecutive weeks now, underscoring the difficulties of getting new job opportunities in the recession.

A separate report from the Commerce Department showed the housing-led output contraction is curbing appetite for imports, helping to narrow the country's trade deficit.

The monthly trade gap totaled $26 billion, down more than $10 billion from the revised $36.2 billion deficit in January and marking a record seven consecutive months of decline.

The February percentage drop was the steepest since a 34.9 percent fall in October 1996. U.S. exports of goods and services in February rose 1.6 percent from January, while imports fell 5.1 percent to their lowest level since September 2004.

The U.S. trade deficit with China in February shrank to $14.2 billion -- a 3-year low -- from $20.6 billion in January. The February trade deficit with Japan narrowed to $2.2 billion, -- its lowest level since December 1984 - from $4.3 billion.

Imports fell across all major categories, with crude oil imports falling to their lowest value since April 2004 as the February import average price barrel fell to $39.22 from $39.81 the prior month.

Exports increased slightly across all major categories - food, feed and beverages, industrial supplies, capital goods, automotive and consumer goods.

In another report, the Labor department said U.S. import prices rose in March, advancing for the first time in eight months, as petroleum costs increased at their fastest pace since November 2007.

(Additional reporting by David Lawder in Washington and Richard Leong in New York; Editing by Neil Stempleman)

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