New claims for unemployment insurance fell last week and the number of people continuing to receive benefits also dropped, according to a government report released Thursday. The news provides signs that layoffs may be slowing.
According to the Labor Department report, first-time claims for jobless benefits fell to a seasonally adjusted 550,000 from a revised 576,000 the previous week. The number of unemployed people who are continuing to receive benefits fell by 159,000 to 6.1 million — the lowest number since April.
Although job losses are slowing, last week the Labor Department announced that the unemployment rate had jumped to 9.7 percent in August from 9.4 percent in July. Many economists have predicted that the unemployment rate would hit 10 percent by the end of the year.
Some economists see recent trends as indications that the economy is continuing to improve.
"We're losing jobs at a less rapid pace, and sooner or later, employers can no longer eliminate or shed jobs ... you'll start to see jobs added," said Hugh Johnson, chairman and chief economist at Albany, N.Y.-based Johnson-Illington Advisors.
Johnson predicted there would be modest job growth in the second quarter of 2010, with unemployment peaking in first, second and third quarters at 10.5 percent.
"2010 is going to be a year when employment conditions change from bad news to good news," Johnson said.
Trade Deficit Widens
Meanwhile, the U.S. trade deficit — the gap between imports and exports — widened by 16.3 percent in July, the largest percentage increase in more than 10 years, according to another government report released Thursday.
The Commerce Department put the gap at $32 billion from a revised $27.5 billion in June, due largely to increased demand for imports for the second month in a row.
U.S. consumers' demand for foreign cars and car parts helped drive imports up a record 4.7 percent to $159.6 billion. Demand for toys, clothes, televisions and other imported consumer goods also increased.
David Wyss, chief economist at Standard & Poor's, said part of the increase in imports was a result of higher oil prices. The average price of a barrel of imported oil rose to $62.48 — the sixth monthly increase in a row.
In addition, the popular Cash for Clunkers government rebate program encouraged more dealers to build up their inventory, pushing imports up, Wyss said.
Exports also went up 2.2 percent in July to $127.6 billion — the third monthly increase in a row — reflecting big increases in overseas demand for civilian aircraft, computers, machinery and medical equipment.
Foreclosure Filings Steady
On the housing front, there was some encouraging news from California-based RealtyTrac. According to a report released Wednesday, foreclosure filings were fairly steady in August, decreasing less than 1 percent over the previous month.
In all, 358,471 U.S. properties were receiving default notices or scheduled for auction or bank repossession, according to RealtyTrac. That figure represents an 18 percent increase from the same period last year.
Nevada, Florida, California, Arizona and Michigan continued to have among the highest foreclosure rates in the country. Among cities with at least 200,000 people, Las Vegas had the highest foreclosure rate, followed by the California cities of Stockton, Merced, Riverside-San Bernardino-Ontario, Vallejo-Fairfield and Modesto.
"The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline," said James J. Saccacio, chief executive officer of RealtyTrac.
Poverty Rate Rises
On a darker note, the Census Bureau said Thursday that the U.S. poverty rate rose to 13.2 percent in 2008 — the highest level in 11 years. The poverty rate in 2007 was 12.5 percent.
The Census Bureau figures mean 39.8 million Americans were living in poverty in 2008, up from 37.3 million in 2007. The median household income was $50,303.
In addition, the bureau found a continuing decline in the percentage of the population with private health insurance coverage. It fell nearly a full percentage point last year, to 66.7 percent. The only reason the number of uninsured didn't rise more is that government health programs enrolled an additional 4 million people in 2008.
One bright spot in the data: Both the percentage and number of uninsured children younger than 18 fell to their lowest levels since 1987. The number of uninsured adults, however, has risen to one out of every five.
From NPR staff and wire service reports.