Jobless Claims Ease for Second Straight Week; Inventories Rise
Fewer workers signed up for unemployment aid last week, underscoring stability in the labor market, and inventories at U.S. wholesalers picked up in April in a sign businesses are preparing for more demand later this year.
The numbers of U.S. workers signing up for first-time unemployment benefits slipped by 1,000 to a seasonally adjusted 309,000 for the week ended June 2, the Labor Department reported.
"The core story here, though, remains that companies are not laying people off at the sort of pace that would normally be expected given the slowdown in economic growth. We are very curious to see if this can persist as consumption slows markedly in the face of the surge in gas prices," said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York.
Economists polled ahead of the jobless claims report were expecting initial jobless claims to remain unchanged at a seasonally adjusted 310,000 from the prior week.
The four-week moving average of jobless claims, which irons out weekly fluctuations in this data, moved up to 307,250 from 304,500.
A separate Commerce Department report showed inventories at U.S. wholesalers rising 0.3 percent in April as stocks of nondurable goods posted the biggest percentage increase in five months.
The rise in inventories matched economist expectations for a 0.3 percent rise after March's previously reported 0.3 percent gain.
The inventories-to-sales ratio, a measure of how quickly stocks would be depleted at the current sales pace, fell for the fourth straight month, dropping to 1.12 months from 1.13 months in March, according to the Commerce Department data.
"The decline in the wholesale inventory-sales ratio to a record low level supports our view that inventory levels are inadequate and inventory accumulation going forward is likely to support growth," economists at Bear Stearns wrote in a report shortly after release of the Commerce Department data.
Stocks of durable goods, items meant to last at least three years, fell 0.5 percent in April, the biggest drop since July 2003, after a 0.1 percent decline in March.
But inventories of nondurable goods rose 1.6 percent, the biggest monthly gain since November of last year. However, much of that gain reflected a 6.3 percent increase in petroleum stocks ahead of heavy demand expected during the summer driving months.
Automotive inventories fell 3.5 percent, the largest drop since a 4.0 percent fall in April 1998.