Economic reports hold hope for gains in hiring, growth

Jobless aid applications fall, providing energy to recovering economy
2013-05-03T00:00:00Z Economic reports hold hope for gains in hiring, growthThe Associated Press The Associated Press
May 03, 2013 12:00 am  • 

WASHINGTON - Fewer Americans are losing their jobs. Employers are struggling to squeeze more work from their staffs. The U.S. is producing so much oil that imports are plunging, narrowing the trade deficit.

A string of data Thursday raised hopes for stronger hiring and U.S. growth in the coming months. More jobs would spur spending and help energize the economy, which has yet to regain full health nearly four years after the Great Recession officially ended.

And an interest rate cut Thursday by the European Central Bank, if it helps bolster the European economy, could also contribute to U.S. growth.

The U.S. government will report today how many jobs employers added in April. Economists expect the report to say that employers added more than 100,000 jobs in April but fewer than last year's pace of nearly 185,000 jobs a month. The unemployment rate is expected to remain unchanged at 7.6 percent.

The government said Thursday that the number of Americans applying for unemployment aid fell last week to a seasonally adjusted 324,000 - the fewest since January 2008. Unemployment applications reflect the pace of layoffs: A steady drop means companies are shedding fewer workers. Eventually, they'll need to hire to meet customer demand or to replace workers who quit.

The four-week average of unemployment applications, which is less volatile than the weekly figure, sank to 342,250. That was near a five-year low.

The government also said Thursday that the productivity of U.S. workers barely grew from January through March after shrinking in the last three months of 2012. Productivity shows how much employees produce per hour of work. When it remains weak, employers can't keep pulling more output from their staffs. As customer demand strengthens, they'll need to hire.

Productivity grew at a seasonally adjusted annual rate of 0.7 percent in the January-March quarter. And that was after it shrank in the October-December quarter. For all of 2012, productivity rose a scant 0.7 percent, after an even punier 0.6 percent rise in 2011.

At the same time, the government said the U.S. trade deficit narrowed in March for a second month. The main reason: The daily flow of imported crude oil reached a 17-year low.

The trade gap shows how much the value of imports exceeds the value of exports. A smaller trade gap is good for economic growth because it means America is exporting more while spending less on foreign goods.

The gap shrank 11 percent from February to $38.8 billion. Exports fell 0.9 percent, led by fewer shipments of U.S. machinery, autos and farm products.

But thanks to reduced U.S. demand for imported oil, imports fell even more - 2.8 percent. Petroleum imports fell 4.4 percent. Crude-oil imports averaged 7 million barrels a day, the fewest since March 1996.

The United States isn't using less oil. Rather, surging U.S. production has reduced the need for imported oil. U.S. output averaged 7.2 million barrels a day for the four weeks that ended March 29, the Energy Department says. That's the most since 1992.

U.S. refiners have been taking advantage of low U.S. prices for oil and natural gas to produce fuels at much lower costs than their foreign competitors can.

The European Central Bank's move Thursday to cut its key interest rate to a record low 0.50 percent and unveil other measures to spur lending means companies and households in the euro alliance will find it cheaper to borrow. Those lower borrowing costs, in turn, could help the U.S. economy if they allow European consumers and businesses to buy more U.S. exports.

Some economists cautioned that the ECB's actions might not help much because European banks remain reluctant to lend, especially to small companies.

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