US records fall in new claims for unemployment benefit

THE NUMBER of US workers filing new claims for unemployment benefits fell last week, but was still at levels indicating the labour market’s contraction has yet to bottom.

However, a separate report from the US department of commerce showed the country’s trade deficit shrank in February to its smallest since November 1999, backing the view that the drop in first-quarter gross domestic product was probably not as steep as the previous period’s 6.3 per cent annual pace of decline in productivity.

There were further positive signs from the retail sector with many US retailers posting smaller-than-expected sales declines for March in a sign that shoppers may be regaining confidence to open their wallets after more than a year of recession.

Of the US retailers that reported March sales at stores open at least a year, more than half topped Wall Street estimates, and a handful even raised their quarterly earnings outlooks this week.

The Labor Department also said the ranks of unemployed who have claimed more than one week of aid vaulted to yet another record in the last week of March as laid-off workers battled to find jobs amid a recession that is now in its 16th month.

“The small amount of good news is that it appears as though the trend in claims over the last eight weeks has levelled off, but there is nothing here to suggest that the drop in employment is anywhere near the bottom,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh.