WASHINGTON, April 2 (Reuters) – New claims for U.S. jobless benefits fell sharply last week to a record low, suggesting labor market conditions remained calm in March, even as economists warned that protracted conflict in the Middle East could cause serious harm.
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“We expect slower job growth and a higher unemployment rate for 2026 than we expected before the war,” said Nancy Vanden Houten, a leading US economist at Oxford Economics. “But the impact of the war on the labor market will take more time to materialize.”
Initial claims for federal jobless benefits fell 9,000 to a seasonally adjusted 202,000 for the week ended March 28, the Labor Department said Thursday. Economists polled by Reuters had predicted 212,000 claims for the latest week.
Reports have ranged from 201,000-230,000 this year, following what economists describe as a “low-rent, low-fire market”. They blamed the collapse of the labor market on the uncertainty caused by Trump’s tough foreign tariffs. Nonfarm payrolls have averaged 18,000 jobs per month in the three months through February.
A reduction in the labor supply due to the Trump administration’s tough immigration policy was also hampering job growth, economists said. The claims report is unrelated to March’s closely watched jobs report as it falls outside the survey period. Nonfarm payrolls are likely to have increased by 60,000, a Reuters poll of economists showed.
Payrolls fell by 92,000 jobs in February in part due to a strike by health care workers and bad weather. The unemployment rate is forecast to remain steady at 4.4% in March. The Bureau of Labor Statistics will release the March employment report on Friday. Good Friday is not a public holiday in the United States, although some stock markets are closed.
The number of people receiving unemployment benefits after the first week of aid, the hiring manager, increased by 25,000 to a seasonally adjusted 1.841 million in the week ended March 21, the claims report showed.
US stocks edged lower. The dollar gained against a basket of currencies. US Treasury yields rose.
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Changes in business policy continue to cause uncertainty affecting business data. A separate report from the Bureau of Economic Analysis and the Census Bureau of the Department of Commerce showed that the trade deficit increased by 4.9% to $57.3 billion in February. Economists had predicted that the trade deficit would rise to $61.0 billion.
Economists expect war-related shipping restrictions, which have affected goods ranging from energy products to fertilizers through the Strait of Hormuz, to reduce the volume of trade.
Exports increased 4.3% to $372.1 billion in February. Imports rose 5.0% to $291.5 billion. They were boosted by imports, which added $7.8 billion, mainly showing computers, computer equipment and semiconductors. These imports may be associated with artificial intelligence and the construction of data centers.
The price of industrial goods and imports increased by $3.1 billion, mainly boosted by crude oil. Consumer goods rose $2.2 billion during a $1.0 billion increase in pharmaceutical preparations. Imports of cars, parts and engines increased by $1.6 billion.
Imports jumped 4.2% to a record high of $314.8 billion. Exports rose 5.9% to an all-time high of $206.9 billion.
Exports of industrial goods and supplies rose $10.2 billion to a record high amid gains in gold and natural gas. Non-petroleum imports also hit a record high.
The goods trade deficit widened 3.0% to $84.6 billion in February. Adjusted for inflation, the inventory deficit increased $0.5 billion, or 0.6%, to $83.5 billion, which is likely to keep business on track to continue to drive economic growth in the first quarter.
Business fell short of gross domestic product growth in the fourth quarter. The Atlanta Federal Reserve predicts that GDP will increase at an annual rate of 1.9% in the first quarter. The economy grew at a pace of 0.7% in the fourth quarter.
Foreign services increased by $1.1 billion to a record $107.9 billion amid a rise in travel, other business services, financial services and fees for the use of intellectual property. But the transport services went down.
Services imports rose $1.3 billion to a record high of $80.6 billion, boosted by tariffs on intellectual property.
Reporting by Lucia Mutikani; Edited by Chizu Nomiyama and Andrea Ricci
Our standards: The Thomson Reuters Trust Principles.
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