Exports Declined as U.S. Trade Gap Widened in April
10 June 2010
WASHINGTON (AP) — A picture of a steady but still sluggish economic recovery emerged from reports Thursday that showed fewer people were claiming unemployment aid while United States exports were slowing.
The reports echo a suggestion this week from the Federal Reserve chairman, Ben S. Bernanke, that the rebound will remain intact despite high unemployment, a fragile housing market and Europe’s debt crisis. But it will take time to create enough jobs to bring down the 9.7 percent unemployment rate.
Initial unemployment claims fell by 3,000, to a seasonally adjusted 456,000, the Labor Department said Thursday. It was the third consecutive decline, but claims have not moved below where they stood in January.
At the same time, the tally of laid-off workers continuing to claim jobless benefits fell by 255,000, the biggest decline in almost a year, to 4.5 million. It could be because more people are finding work. But it may simply mean that they have exhausted their initial state benefits. A Labor Department analyst said state agencies didn’t provide any explanation for the drop.
A weakening in United States sales overseas could hurt the job market. The Commerce Department said the trade deficit rose to the highest level in 16 months as exports fell for the second time in three months. Exports have been a source of strength for United States manufacturers.
The trade deficit widened to $40.3 billion in April, up 0.75 percent from March. Exports dropped 0.7 percent while imports declined by 0.4 percent.
For April, exports slipped to $148.8 billion; demand for farm products fell by $647 million and weakness spread across a number of manufactured goods, from electric generators to industrial machinery and aircraft engines. Imports edged down to $189.1 billion. Demand for oil was basically unchanged from March, while total consumer goods imports dipped by $741 million, with the biggest decline coming in pharmaceutical products.
First-time jobless claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns among economists that hiring remains weak and could slow the recovery.
Claims peaked at 651,000 in March 2009. Most economists will feel more optimistic that the economy is creating jobs once they fall below 425,000.
“The downward trend in layoffs which began in the spring of last year is clearly over, at least for now,” said Ian C. Shepherdson, chief United States economist for High Frequency Economics. “With claims stranded at this level, big private sector payroll gains are just not on the agenda.”
Last week, the Labor Department said the economy generated only 41,000 private-sector jobs in May, down from 218,000 in April. Temporary census hiring added another 411,000 jobs.
Economists also closely watch the total number of people claiming benefits. They monitor those who are initially receiving 26 weeks of state benefits, on average. But they are also concerned about the number of people who have transitioned to extended federal benefits, which can last up to 73 additional weeks.
Nearly 5.4 million Americans are receiving extended benefits. All told, about 9.8 million people drew unemployment in the week ended May 22, the latest data available.
That total is likely to drop in the coming weeks. The extended benefit program expired in early June, and Congress is debating whether to continue it through the end of November.
About 325,000 people will lose unemployment aid by the end of this week due to the cutoff, the department estimates. That total could grow to 1.25 million by the end of the month if the extension is not passed.A version of this article appeared in print on June 11, 2010, on page B7 of the New York edition.