WASHINGTON -- The number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend continued to point to some strength in the labor market.
Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 326,000, the Labor Department said Thursday. Economists had forecast first-time filings for jobless aid rising to 317,000 in the week ended March 29.
The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, hovered near six-month lows, indicating a firmer bias in the labor market.
"It's broadly consistent with moderate growth in the jobs market," said Michael Hanson, a senior economist at Bank of America Merrill Lynch (BAC) in New York.
Despite last week's increase, claims have been generally stable in March, which should support expectations of an acceleration in job growth during the month.
The government's closely watched employment report on Friday is expected to show nonfarm payrolls increased by 200,000 jobs last month after rising 175,000 in February, according to a Reuters survey of economists. The unemployment rate is seen falling one-tenth of a percentage point to 6.6 percent.
The labor market suffered a setback in December and January when unseasonably cold weather gripped large parts of the country. With temperatures rising, a pick-up is in the cards, which should help to unleash pent-up demand and put the economy on a stronger growth trajectory.
Trade Gap Widens
In a separate report, the Commerce Department said the trade gap increased 7.7 percent to $42.3 billion in February, the largest since September last year, as exports fell to their lowest level in five months.
January's shortfall was revised to $39.3 billion from a previously reported $39.1 billion.
"It should be a modest drag on first-quarter GDP," said Pierre Ellis, senior global economist at Decision Economics in New York. "It's relatively strong on the U.S. side but the rest of the world is not helping."
Economists had forecast the trade deficit falling to $38.5 billion. In addition to weak exports, February's rise in the deficit likely reflected an increase in the price of crude oil.
Declining petroleum imports as a domestic energy production boom reduces the nation's dependency on foreign oil have helped to shrink the trade deficit. %VIRTUAL-article-sponsoredlinks%That saw the current account deficit hitting a 14-year low in the fourth quarter of 2013.
Trade was one of the key drivers of economic growth during the last three months of last year, a trend that is unlikely to be repeated in the first quarter.
Growth in the first three months of 2014 is expected to have slowed to an annualized pace below 2 percent. The economy grew at a 2.6 percent rate in the fourth quarter.
When adjusted for inflation, the trade gap widened to $50.1 billion in February from $48.5 billion the prior month.
Exports slipped 1.1 percent to $190.4 billion in February. That was the lowest level since September. Imports edged up 0.4 percent to $232.7 billion.
Exports to China fell 4.6 percent in February. Imports from that country tumbled 19.5 percent, narrowing the politically sensitive U.S. trade deficit with the world's second-largest economy to its smallest since March 2013.
The drop in imports was probably due to the Chinese New Year holiday.
9 Numbers That'll Tell You How the Economy's Really Doing
Weekly Jobless Claims Rise, Trade Deficit Widens
The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.
The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.
The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.
The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.
Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.
Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.
The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.
Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.