World Bulletin / News Desk
The number of Americans filing new claims for jobless benefits edged higher last week although a trend reading fell close to a four-year low, pointing to healing in the still-struggling labor market.
Other data on Thursday showed groundbreaking on new U.S. homes fell in July in a reminder of the housing market's weakness despite some recent signs of recovery.
Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 366,000, the Labor Department said. That was in line with economists' forecasts in a Reuters poll.
Claims data, which swung wildly in July due to shifts in seasonal auto plant shutdowns, are now giving a clearer picture of modest improvement in the labor market.
The data reinforces the view that economic growth could pick up in the second half of the year. But even then, the recovery is seen to be lackluster and perhaps in need of more support from the Federal Reserve.
"Overall, they (the data) are consistent with our outlook that growth will be a little bit better in the U.S. but not as upbeat as some people think," said Brian Kim, a currency strategist at RBS Securities inStamford, Connecticut.
"We're still looking at possible Fed action in September and these numbers don't really alter that view."
The four-week moving average for new claims, a better measure of labor market trends, dropped 5,500 to 363,750. That was the lowest since March - and the second lowest since April 2008.
U.S. nonfarm payrolls increased 163,000 in July after three months of gains below 100,000, although the unemployment rate ticked higher to 8.3 percent.
The pickup in hiring last month, along with gains in retail sales and manufacturing output, has dampened expectations the Fed could announce at its next meeting a plan to stimulate the economy with a third round of bond purchases. Officials at the Fed next review policy on Sept. 12-13.
U.S. stock index futures held onto earlier gains following the data.
The U.S. economy still faces a number of threats, including the looming possibility the government will raise taxes and cut spending next year. That is already hurting business sentiment.
Europe's festering debt crisis also menaces and is weighing on the global economy. China's Commerce Ministry said on Thursday the outlook for its exports has darkened.
Wal-Mart Stores Inc forecast full-year earnings that could fall short of Wall Street expectations as growth in international markets slows, even as its U.S. discount stores saw improved sales in a tepid U.S. economy.
Another report due on Thursday is expected to show factory activity contracted in the mid-Atlantic region for the fourth straight month in August.
That would be the second regional manufacturing report to show contraction during the month. On Wednesday, the New York Federal Reserve bank said factory activity slipped this month for the first time since October 2011.
In another somewhat downbeat sign, the Commerce Department said housing starts dropped 1.1 percent last month to a seasonally adjusted annual rate of 746,000 units.
The reading was below the median forecast in a Reuters poll of a 757,000-unit rate.
The government also revised lower its estimates for starts in recent months. But economists said the readings, which are prone to significant revisions, still pointed to healing in the housing market.
"This is nothing but normal statistical noise," said Stephen Stanley, an economist at Pierpont Securities in Stamford, Connecticut.
The U.S. housing market, which fell into a deep rut six years ago, has been a relative bright spot in the economy this year.
Home prices have shown signs of stabilizing and many economists think housing construction will give a small boost to the economy this year.
There were also some positive signals in Thursday's report. New permits for building homes rose 6.8 percent in July to a 812,000 unit pace, the highest rate since August 2008.
But outside of housing, the broader economy has looked wobbly this year, which could hold back gains in home building.
European stock markets are also set for a weak start, with Italy underperforming as investors brace for turbulence and political crisis in the euro zone's heavily indebted third-largest economy.
The euro tumbled on Monday after Italian Prime Minister Matteo Renzi said he would resign as he conceded defeat in a referendum over his plan to reform the constitution
Rouhani's 2017-2018 budget is based on oil prices of $50 per barrel, up from $40 last year, with a focus on unemployment, water resources, railways and the environment.
Turkish parliament has already ratified the deal on construction of ‘TurkStream’ natural gas pipeline
The September rate was revised to 9.9 percent from the 10 percent first given last month.
Many analysts had expected the producers' cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.
The report, which collects views of economists, business contacts and others in the 12 Federal Reserve districts in preparation for the monetary policy meeting next month, noted improved retail sales and home construction in most regions.
If the cartel does not reach a deal to cut output, prices could fall below $40 a barrel
European air travel giant Lufthansa has been battling its own pilots over pay and conditions for more than two years.
Failure to get an accord on Wednesday could send oil prices tumbling and deal a further blow to the credibility of the 56-year-old Organization of the Petroleum Exporting Countries.
Around midday, shares in Italian lenders Unicredit and Banco Popolare were down 4 percent compared with Friday's closing levels.
Officials on Friday's said the tie-up between the Hong Kong and Shenzhen markets will start on December 5.
The announcement comes as the country is gearing up for a key election next year, with the parties in Chancellor Angela Merkel's grand right-left coalition keen to woo ageing voters.
The weak inflation data -- core prices excluding fresh food fell 0.4 percent from a year ago -- come several weeks after Japan's central bank pushed back the timeline for hitting its 2.0 percent inflation target.
Roberto Azevedo says he is 'ready to talk' to US President-elect who has promised to pull US out of other trade agreements