Initial jobless claims in the US drop to lowest level since 2008

 
City A.M. Reporter
THE NUMBER of Americans filing new claims for unemployment benefits collapsed last week to its lowest level since January 2008, revealing a remarkably positive sign for the US recovery.

Other data published yesterday showed a narrowing of the US trade gap in March, although drops in imports and exports offered warning signs over the strength of domestic and foreign demand.

The labour market news was positive, nonetheless. Initial claims for state unemployment benefits dropped 18,000 to a seasonally adjusted 324,000 last week, the Labor Department said.

The claims report runs counter to a growing number of signals that economic activity softened in March and April, a phenomena economists have dubbed the spring swoon because it also happened in the previous two years.

“Growth slowed between the first and second quarters, but the claims data suggest that the extent of this slowing was limited,” said Daniel Silver, an economist at JP Morgan.

The data on claims has no direct bearing on the Labor Department’s monthly employment report for April due this afternoon. However, it suggests employers are feeling less pressure to lay workers off, even if they have cut back on hiring.

Meanwhile, the narrowing of the trade gap to $38.8bn could help America’s GDP result. Yet the data revealed exports and imports recording their biggest drop since 2009, pointing to weak demand.