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US jobless claims jump above forecasts; prices still tame

Galit Rodan | Bloomberg | Getty Images

The number of Americans filing new claims for unemployment benefits rose last week, although the level still appeared to point to healing in the nation's job market. Meanwhile, prices for U.S. imports and exports fell in June for the fourth straight month.

Initial claims for state unemployment benefits increased by 16,000 to a seasonally adjusted 360,000, the Labor Department said on Thursday.

The reading was likely clouded by seasonal factors. The Labor Department can have a tough time seasonally adjusting claims in early July because many factories shut down during that period for retooling, but the scheduling for the shutdowns varies from year to year.

A Labor Department analyst said there was nothing otherwise unusual in the data and that no states had provided estimates.

Even with the increase, the number of layoffs remains in the range of the levels seen over the last year, and is consistent with a continued drop in the unemployment rate.

The four-week moving average of new claims, which is considered a better measure of labor market conditions, increased by a more modest 6,000 to 351,750.

Economists polled by Reuters had expected first-time applications to fall to 340,000 last week. Claims for the prior week were revised to show 1,000 more applications received than previously reported.

The U.S. labor market has shown signs of strength in recent weeks, with 195,000 jobs added to payrolls in June. This has cemented expectations the Federal Reserve will start winding down its massive stimulus program as early as September.

Minutes to the Fed's June meeting released on Wednesday showed about half of its policymakers felt the U.S. central bank's bond-buying stimulus should be brought to a halt by year end, but many wanted reassurance the U.S. jobs recovery was on solid ground before any policy retreat.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 24,000 to 2.98 million in the week ended June 29.

Little Price Pressures in Imports, Exports

Declining import and export prices were seen as a sign of cooler economic growth worldwide that could weigh on the American economy and unnerve policymakers.

Export prices fell by 0.1 percent, matching the expectation in a Reuters poll, Labor Department data showed on Thursday.

The drop probably reflects weakness in global demand which has been hit by Europe's debt crisis and slowing growth in China.

Import prices slipped 0.2 percent last month, dragged down by another month of declining costs outside of the fuels category. Petroleum prices rose 0.2 percent.

Prices for both imports and exports have fallen every month since March, the longest such streak since 2008 when the world was mired in a financial crisis.

The drop in prices last month for imported cars and other consumer goods could help some U.S. consumers. However, some economists are worried an environment of weak inflation could raise the specter of deflation. That would be very bad, as deflation entails a spiral of falling prices and wages which is very difficult for central banks to fight.

Economists polled by Reuters had expected import prices to be unchanged last month.

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