The picture of an economy growing modestly without producing inflation yet struggling to create jobs emerged from government reports Thursday.
WASHINGTON - The picture of an economy growing modestly without producing inflation yet struggling to create jobs emerged from government reports yesterday.
While the number of newly laid-off workers requesting jobless benefits fell slightly last week for the third time, initial claims remain above levels that would signal net job gains.
New claims for unemployment aid fell 5,000 to a seasonally adjusted 457,000, the Labor Department said. That nearly matched analysts' estimates of 455,000, according to Thomson Reuters.
In a separate report, the Labor Department said consumer prices were flat in February. A rise in food prices was offset by a drop in gasoline and other energy costs. Excluding the volatile food and energy categories, the core Consumer Price Index edged up just 0.1 percent last month, matching economists' estimates.
The consumer price index didn't increase for the first time since it dropped in March, 2009, and followed a 0.2 percent gain in January, the report said. Excluding food and energy costs, the so-called core index increased 0.1 percent, in line with forecasts, capping the smallest year-over-year gain since 2004.
The report adds to evidence that the weak economy has all but erased inflation. That allows the Federal Reserve to efforts to revive the economy by keeping the short-term interest rate it controls at a record low near zero.
In another report, a private research group said its gauge of future economic activity rose just
0.1 percent in February, suggesting slow growth this summer. The gain in the Conference Board's index of leading economic indicators was the smallest in 11 months.
The index is intended to forecast economic activity in the next three to six months based on a variety of economic data. Also, the current account trade deficit widened in the fourth quarter, the Commerce Department said, reflecting an improving economy. Imports of oil, autos, and other products outpaced gains in U.S. exports. But the trade gap for all of 2009 fell to its lowest point in eight years.
Economists say they think the deficit will widen during 2010, though not to the record heights seen before the recession. A weaker dollar is expected to boost U.S. exports. A weaker dollar makes U.S. goods cheaper overseas and foreign goods costlier for U.S. consumers.
The current account is the broadest gauge of trade because it includes not only trade in goods and services but also investment flows between countries. It measures how much the country must borrow from foreigners.