WASHINGTON (MNI) - The U.S. Initial Unemployment Claims reading of 350,000 in the October 19 week probably again is providing a 'false signal' about underlying labor market trends being far worse. We remain unsure how far this number can fall, though the 320,000 of August could be a target.
Claims again reflect some of the temporary effects of the U.S. government closing on private jobs, though the Labor Department analyst said the states that initially saw spikes in claims had reversed lower. The analyst also said that the state of California continues to process a backlog of claims after repairing its computer systems and that this event, now in its sixth week, is elevating the total.
Claims should continue trending lower ahead as these temporary factors resolve. Still, the data imply that October payrolls could come on the weak side of recent readings.
Continuing claims were down 8,000 to 2.874 million in the October 12 week. This compares to 2.821 million in mid-September and indicates a somewhat steadier state for the labor market.
In a separate report released at the same time, the August trade balance was reported barely changed at -$38.8 billion, as both imports and exports moved little in the aggregate. This suggests the trade sector will add a bit to Q3 GDP growth.
The August trade balance was -$38.8 billion as imports were unchanged and exports fell a modest $0.1 billion. The lack of change in the overall picture masks some big moves, however, that reflect higher commodities prices and a decrease in collecting.
In exports, industrial supplies were down $1.3 billion on lower nonmonetary gold and oil amounts, despite rising prices. This was offset by +$0.7 billion in autos to a record level, and a surge in gems.
In imports, pharmaceuticals were -0.7 billion but computers at +$0.7 billion contributed to +$1 billion in capital goods overall. Art and antiques fell $297 million. Crude oil imports were down $594 million as volume fell; the average price per barrel of oil at $100.26 was the highest since May 2012.
Unadjusted trade balances by country included: China -$29.9 billion (imports from China were a high since November 2012) after -$30 billion in July; Japan -$6.4 billion after -$6.8 billion; OPEC -$7.3 billion after -$7.4 billion.
The real trade balance for July-August on average stands slightly narrower than the Q2 average. Thus the main take-away is that trade should add to Q3 growth.
