New data points to more hiring, greater exports

WASHINGTON — The outlook for the U.S. economy brightened a little Thursday after new data pointed to improvement in hiring and greater exports.

The number of Americans applying for unemployment benefits last week fell by 6,000 to a seasonally adjusted 361,000, the Labor Department said. Economists noted that the level suggests the modest job creation in July could carry over into August.

Also, the U.S. trade deficit narrowed to $42.9 billion in June from $48 billion in May, the Commerce Department said, the lowest level in 18 months. The drop was largely because of cheaper oil imports. But exports also rose to a record-high $185 billion, an encouraging sign at a time when global growth has slowed. U.S. companies even sold more goods in Europe, despite the region's ongoing financial crisis.

Some economists revised their growth forecasts higher for the April-June quarter after seeing the better trade data. A smaller trade deficit acts as less of a drag on growth because it means the United States is spending less on foreign-made products and is taking in more from sales of U.S.-made goods.

The economy is looking more resilient after faltering in the spring.

Employers added 163,000 jobs in July, the biggest increase since February. From April through June, employers had created a lackluster 73,000 jobs a month, not enough to keep up with a rising population.

Unemployment claims had averaged 385,000 a week in June before the numbers were muddied last month by seasonal factors related to temporary summertime layoffs in the auto industry.

The seasonal distortions had faded by last week, providing a clearer picture of a slightly improved job market.

"The clear decline since June provides some corroboration of the better-than-expected payrolls reading," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics. "In short, encouraging data for the recovery."

Economists are worried that slower overseas growth will eventually reduce demand for U.S. exports. About one-fifth of U.S. exports go to Europe, which is in the third year of a financial crisis.

"It is surely only a matter of time before a deep recession in the eurozone starts to take a greater toll on U.S. exports," said Paul Dales, an economist at Capital Economics. So far, that hasn't happened. Exports to the 27-nation European Union grew 1.7 percent in June.

New data points to more hiring, greater exports 08/09/12 [Last modified: Thursday, August 9, 2012 11:16pm]

Copyright: For copyright information, please check with the distributor of this item, Associated Press.

Join the discussion: Click to view comments, add yours

Loading...