US figures for inflation and weekly unemployment claims released yesterday were broadly as analysts had predicted, pointing to an economy that continues to slowly improve.
Separately, a sharp narrowing in the US trade deficit reflected the growing strength of exports.
Initial unemployment claims totalled 398,000 in the week ending August 9th - up 2,000 from the previous week. Although claims were on the rise, this marked the fourth week that new claims stayed below 400,000 - commonly viewed by economists as the cut-off point for a trend of increasing employment.
The four-week moving average dropped to 394,250, the lowest in six months.
"This suggests that the job market is improving and is consistent with flat to slightly up payrolls in the month of August," Mr Gerald Cohen, senior US economist at Merrill Lynch, said in a report.
In a separate report, the US Department of Labour said its producer price index (PPI), a measure of wholesale-level inflation, climbed 0.1 per cent for July, following an increase of 0.5 per cent in June. The core PPI, which excludes volatile food and energy components, gained 0.2 per cent, against an 0.1 per cent slide in June. The figures met most economists' expectations.
Mr Richard Yamarone, economist at Argus Research, said that, although the data showed the Federal Reserve had inflation well under control, it was a "wet firecracker" for those looking for stronger signs of improvement.
Meanwhile, the Department of Commerce said the US trade deficit in June narrowed to $39.55 billio(€35.2 billion) from $41.8 billion in May. Economists had expected the figure to drop only slightly, but exports climbed nearly $2 billion to $84.6 billion, as imports stayed flat.
"We may be seeing some signs that the weaker dollar is making US exporters more competitive," said Mr David Wyss, chief economist for Standard & Poor's. But he cautioned that the figure could prove to be a "one-month blip".
The trade gap with China continued to grow to $10 billion or a quarter of the total US trade deficit. But Mr Alan Levenson, chief economist for T Rowe Price, called concerns about the growing trade gap overblown. - (Financial Times Service)
