US adds 13,000 to unemployment rolls in latest disappointing claims report

Dominic Rushe in New York / guardian.co.uk, Thursday 12 April 2012 11.38 EDT

http://www.guardian.co.uk/world/2012/apr/12/us-unemployment-jobless-benefits-claims

The number of new claims for unemployment benefits rose unexpectedly last week in another sign of the fragility of the recovery in the US jobs market.

Initial claims for state unemployment benefits rose 13,000 to 380,000 in the week ending 7 April, the largest rise in nearly a year, the labor department said. Economist polled by Reuters had been expecting claims to fall to 355,000.

The numbers come less than a week after disappointing news about the new jobs the US is creating. Last Friday the labor department announced the US had added 120,000 new jobs in March, half the number created in February. March's number ended a four-month streak in which the US had added over 200,000 jobs a month.

Every jobs report is being parsed by Washington as President Barack Obama gears up for the election. Mitt Romney, the likely Republican nominee, has consistently attacked Obama's record on the economy and jobs. "It is increasingly clear the Obama economy is not working and that after three years in office the president's excuses have run out," Romney said after last week's jobs report.

The latest unemployment claims figures came as figures from the commerce department reported a narrowing trade deficit that also showed a sharp fall in US imports, a signal that domestic demand is weakening. The commerce department said the monthly trade gap unexpectedly shrank 12.4% to $46bn, the biggest month-to-month decline since May 2009.

Paul Dales, senior US economist at Capital Economics, said it was important not to read too much into one week's figures. He said the Easter and Passover holidays may have affected the jobs numbers, and it was still too early to tell whether the jobs market recovery was stalling.

Dales said the narrowing trade gap was a good sign for the US. He is now predicting that the US's gross domestic product, the broadest measure of an economy's growth, grew 2.5% in the first quarter, up from his previous prediction of 2%.

"It's boring growth, but compared to Europe or the UK it looks pretty good. Europe could go back into recession this year; things look a lot better in the US," he said.