WASHINGTON (Reuters) ? New claims for jobless benefits were little changed last week and the trade deficit narrowed marginally in August, indicating a modest improvement in the economy.
Initial claims for state unemployment benefits dipped 1,000 to a seasonally adjusted 404,000, the Labor Department said on Thursday. Economists had expected claims to rise to 405,000.
A separate report from the Commerce Department showed the trade deficit fell to $45.61 billion in August from $45.63 billion the prior month. Economists had expected the trade gap to widen to $45.8 billion.
"Three consecutive weeks of claims around 400,000 are somewhat reassuring, as they suggest that layoffs remain contained despite high uncertainty in the economy," said Guy Berger, senior economist with RBS in Stamford, Connecticut.
"We continue to expect moderate growth rather than a recession, but in the latter scenario claims would be among the earliest signals of a contraction in the labor market."
The dollar extended gains against the euro on Thursday after the data, while prices of Treasury securities rose modestly.
Stock index futures trimmed losses as investors focused on weaker-than-expected economic data in China.
The trade report also showed that the U.S. trade gap with China widened to a record high as imports hit an all-time high of $37.4 billion. The U.S. Congress has been considering legislation to penalize China for its trade and currency practices.
Nonfarm employment increased 103,000 in September after gaining 57,000 the prior month, the department reported last week. While payrolls last month were lifted by the return of 45,000 Verizon Communications workers, key measures of labor market health showed some improvement.
Initial claims stayed close to the 400,000 mark usually associated with some improvement in the jobs market for a third straight week.
More signs of improvement in the labor market could further diminish the chances of a new recession, but much of the economy's fortunes now depend on how Europe handles its debt crisis.
A Labor Department official said there was nothing unusual in the state-level data, but noted that claims tended to show large increases at the start of a quarter.
The model used by the department to smooth out seasonal variations had expected a large increase in claims last week and since the figure came in close to expectations, there was little change in the seasonally adjusted level.
Since Monday was a federal holiday, four states including California and Virginia, gave estimates. But the Labor Department official said these tended to be accurate and he did not anticipate major revisions to the data next week.
The four-week moving average of claims, considered a better measure of labor market trends, fell 7,000 to 408,000.
The number of people still receiving benefits under regular state programs after an initial week of aid dropped 55,000 to 3.67 million in the week ended October 1.
Economists forecast so-called continuing claims unchanged at 3.70 million.
The number of Americans on emergency unemployment benefits fell 11,412 to 3.02 million in the week ended September 24, the latest week for which data is available.
A total of 6.82 million people were claiming unemployment benefits during that period under all programs, down 39,203 from the prior week.
(Reporting by Lucia Mutikani and Jason Lange; Editing by Neil Stempleman)
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