Jobless Claims Soar; Exports Show Strength : Economy: Unemployment benefit applications jump by 79,000 in early December. Higher sales abroad trim the U.S. trade deficit to $6.7 billion in October.
The number of newly laid-off workers applying for first-time unemployment benefits jumped by 79,000 during the first week of December, the Labor Department reported Thursday, providing yet another sign of the recession’s toll on the U.S. job market.
In a separate report, the Commerce Department said surging sales of U.S. products overseas helped trim the nation’s trade deficit to $6.7 billion in October, one of the few bright spots in an otherwise gloomy economy.
The number of Americans filing initial claims for unemployment benefits increased to 493,000 during the week ending Dec. 7, matching a recent high posted in November. Initial claims set an eight-year record of 540,000 in March.
While the latest jump was troubling, economists noted that some of the increase represented a rebound from the previous week’s decline of 61,000. That figure was considered artificially low because of the Thanksgiving holiday, which reduced the number of days in which jobless workers could file claims.
Even so, analysts had predicted that adjusting for the holiday would have added only about 35,000 to the count of new layoffs.
The weekly increase seems to corroborate other signs of a contracting job market, including massive layoffs announced by General Motors and other big corporations.
Over the four weeks ending Dec. 7, initial claims for jobless benefits averaged 449,000, up slightly from 443,500 during the four-week period ending the previous week. Last July, when it appeared that the economy was recovering from recession, claims dropped to a low of just under 400,000 before climbing again.
“Last week’s improvement in initial claims was caused by the holiday, and this was a correction of that,” said economist Allen Sinai of Boston Co. in New York. “We won’t get a fully clear picture until next week, but the trend is toward deterioration in the job market.”
While the spurt in unemployment claims signaled continued weakness in the job market, analysts were cheered by the strong sales of U.S. goods overseas in October. They cautioned, however, that the trade figures are two months old and may not reflect current conditions.
Exports jumped $1.4 billion in October to $36.7 billion, the Commerce Department reported. The increase was led by sales of manufactured goods, which increased $2 billion to $29.2 billion.
Strong growth in exports of manufactured products, especially high-tech capital goods and advanced technology, represents a rare sign of strength in the current recessionary environment. American producers of manufactured goods posted a $2.9-billion surplus with foreign competitors in October.
At the same time, however, imports rose in October to their highest level in a year, gaining $1.2 billion to $43.5 billion. Purchases of imported products, which generally decline during a recession, have been increasing since August.
Economists expressed surprise at the import surge, noting that the dollar has been relatively weak against foreign currencies and consumer spending has slumped since midsummer. Half the October increase, about $600 million, represented consumer goods.
Economist Irwin L. Kellner of Manufacturers Hanover in New York suggested that import growth in October could be interpreted as a sign of strength in an economy from which the U.S. consumer is widely thought to have fled in panic and despair.
“It shows that here in the United States, people are still buying and want to buy imported goods, even if they are more expensive than domestic goods,” he said.
Deficit Shrinks
Merchandise trade deficit in billion of dollars, seasonally adjusted; import figures exclude shipping ad insurance. Oct., ‘91: 6.73 Sept., ‘91: 6.93 Oct., ‘90: 9.90
Source: Commerce Department
