11:50 AM New York – U.S. weekly jobless claims rose 2,000 to 414,000 and trade deficit declined 13% in July. Exports increased at a faster pace than imports in the month as the dollar remained low and the crude oil prices remained above $100 a barrel for the fourth month in a row.
U.S. stocks opened higher and struggled to gain traction after nearly two hours of trading. Banks were under pressure but industrials advanced ahead of the President Barack Obama’s jobs plan to the lawmakers.
Weekly jobless claims at the end of last week rose and trade deficit declined 13% in July. The health of the jobs market has not been the focus of investors and the U.S. lawmakers for the last six months.
Unemployment rate has been between 8% and 9% in the last one year and consumer spending has been below expectations.
However, the market was focused on the rate decisions in Europe and UK and bond market yields in the euro zone declined.
U.S. Weekly Jobless Claims Rise
Initial claims of weekly unemployment increased 2,000 in the last week to 414,000 according to the data released today by the Labor Department.
The average of the four-week claims increased to 414,750 last week from 411,000 at the end of the previous week.
Total number of people receiving jobless claims declined 30,000 to 3.72 million in the week ended August 27. The number of Americans receiving extended jobless benefits declined 78,500 to 3.6 million in the week ended August 20.
Twenty one states and territories reported an increase in claims and 32 states reported a decrease.
U.S. Trade Gap Shrinks
Exports in July increased 3.6% to $178 billion and imports fell 0.2% to $222.8 billion and trade deficit in the month declined 13.1% to $44.8 billion. The deficit in June was revised lower to $51.6 billion.
The crude oil, which forms the bulk of the U.S. imports, declined a fraction after the oil prices were above $100 a barrel for the fourth month in a row. The average price of the imported crude was $104.27 a barrel in the month.
Goods deficit decreased more than 10% to $60.6 billion and service surplus increased 0.4 billion to $15.8 billion.
Exports increased 15.1% from a year ago month and imports increased 13.6% in the period.
Europe, UK Rates on Hold
European Central Bank left its key lending rate on hold at 1.5% and the Bank of England left its benchmark rate at 0.5% and held its asset purchase program at 200 billion pounds.
The ECB left rates on hold after latest economic data suggested weakening economic growth and faltering employment growth. The central bank lifted rates in from a record low of 1% in April and again in July by 25 basis points.
The ECB President said at a conference that inflation is expected to fall below 2% in 2012 and lowered the bank’s assessment of the economic growth in the region and economy faces “high uncertainty and intensified downside risks.”
Asian Central Banks Hold Rates