NEW YORK, Dec. 9 (UPI) -- The Labor Department said Thursday the number of U.S. workers filing first-time applications for state unemployment benefits climbed to a 10-week high last week.
Analysts said the report fueled worries that the pace of job growth is slowing.
Labor also reported the prices of goods imported into the United States increased at their slowest pace in five months in November as oil prices began to drop, helping to moderate external inflation pressures on the economy.
The Labor Department said seasonally adjusted initial jobless claims rose by 8,000 to 357,000 in the week that ended Dec. 4. The four-week average rose to 341,250, the highest level since the week of Oct. 30.
Economists on Wall Street had expected a decline of 14,000 claims.
The jobless report is a weekly compilation of the number of individuals who filed for unemployment insurance for the first time. This indicator, and more importantly, its four-week moving average, portends trends in the labor market. A stronger job market generates a healthier economy.
Analysts say jobless claims are an easy way to gauge the strength of the job market. The fewer people filing for unemployment benefits, the more have jobs, and that tells investors a great deal about the economy.
By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it's a good bet that interest rates will rise, while bond and stock prices will fall.
Employers sharply slowed the pace of hiring last month, adding a meager 112,000 non-farm jobs to their payrolls. Even before the latest initial-claims numbers were released, some economists fretted that an increase could signal lackluster job growth in December as well.
Federal Reserve policy makers, however, have remained optimistic about the outlook for job creation. Fed Governor Ben Bernanke said last week the economy is likely to reach a state of "full employment" within a year or so. The central bank is widely expected to raise its key interest rate a quarter percentage point to 2.25 percent when its top policy makers meet next week.
The Labor Department's report Thursday offered little evidence of improvement in the job market. The number of workers on the nation's unemployment rolls showed the biggest surge in more than four months in the week that ended Nov. 27.
That number -- involving continuing claims for unemployment benefits -- rose by 91,000 to 2.8 million. The unemployment rate for workers with unemployment insurance rose one-tenth of a percentage point to 2.2 percent.
In all, 36 states and territories reported a decline in unadjusted initial claims for the week of Nov. 27, while 17 reported an increase.
California reported the biggest decline -- a drop of 14,485 that it said reflected the shorter workweek because of the Thanksgiving Day holiday.
Wisconsin reported the biggest increase in unemployment claims, a gain of 10,880 that it attributed to layoffs in the construction, transportation, warehousing and manufacturing industries.
Meanwhile, Labor also said prices of goods imported into the country increased at the slowest pace in five months in November.
Labor said import prices rose 0.2 percent in November after jumping 1.6 percent in October. The slowdown mainly reflected petroleum prices, which fell 2.6 percent. Non-petroleum prices rose 0.7 percent, the fastest rate since January.
Economists on Wall Street had expected imports price to rise 0.2 percent for the month.
The report measures the prices of goods that are bought in the United States but produced abroad and the prices of goods sold abroad but produced domestically.
These prices indicate inflationary trends in internationally traded products.
Changes in import and export prices are a valuable gauge of inflation here and abroad. Furthermore, the data can directly impact the financial markets such as bonds and the dollar.
The bond market is especially sensitive to the risk of importing inflation because it erodes the value of the principal, or the original investment, which is paid back when the bond matures. It also decreases the value of the steady stream of interest rate payments on this type of security. Inflation leads to higher interest rates, also bad news for stocks.
By monitoring inflation gauges such as import prices, investors can keep an eye on this menace to their portfolios.
Labor's report showed that overall external inflationary pressures on the economy moderated in year-on-year terms. In the 12 months through November, prices rose 9.5 percent. That compared with a 9.9 percent increase in the year through October.
But when petroleum products are excluded, import prices were up 3.4 percent in annual terms, marking the biggest year-on-year increase in nine years.
Prices of goods imported from Canada registered the biggest increase in November -- a 1 percent gain, the largest since August.
Prices of imports from the European Union rose for a sixth-consecutive month, climbing 0.2 percent. Prices of imports from Latin America also rose 0.2 percent, moderating after a 3.8 percent increase in October.
Prices of Japanese imports rose 0.1 percent, half the rate in October. Prices of imports from Hong Kong, Singapore, South Korea and Taiwan were unchanged.
Labor also said export prices rose for a third month in a row, climbing 0.3 percent. Prices of agricultural exports dropped 0.1 percent. But prices of nonagricultural exports rose 0.4 percent.
Additionally, the Commerce Department reported wholesalers continued to boost inventories in October.
Commerce said wholesale inventories climbed 1.1 percent in October to a seasonally adjusted $323 billion. September inventories were revised upward to show a 0.6 percent increase after initially posting a gain of 0.5 percent.
Economists on Wall Street had expected wholesale inventories to rise 0.5 percent in October.
Wholesale trade is the dollar value of sales made and inventories held by merchant wholesalers. It is one of the components of business inventories.
Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a slower rate of growth that won't lead to inflationary pressures.
Analysts say wholesale sales and inventory data gives investors a chance to look below the surface of the visible consumer economy. Activity at the wholesale level can be a precursor for consumer trends.
The report showed wholesale sales rose 1.6 percent in October to a seasonally adjusted $281.1 billion, the biggest increase since March. That followed a revised 0.8 percent gain in September, first reported as a 0.6 percent increase.
The inventory-to-sales ratio was unchanged at 1.15 in October from September. The ratio measures how many months it would take for a firm to exhaust its current inventory.
Commerce said inventories of durable goods, or items meant to last three or more years, rose 1.7 percent in October, up from 1.3 percent in the previous month. Durable goods sales increased 1.8 percent, up from a 0.1 percent rise in September.
The report showed the rise in durable goods inventories was led by increases in stocks of metals and professional equipment, and there were gains in all categories except automobiles.
Metals inventories rose 6.7 percent, while stocks of professional equipment were up 2.1 percent. Auto inventories fell 0.7 percent in October.
The report showed the rise in durable goods sales was led by a 4.3 percent gain in sales of miscellaneous equipment and a 4.2 percent increase in sales of metals. Auto sales rose 1.2 percent, while furniture sales fell 2.6 percent.
Inventories of non-durable goods rose 0.1 percent in October, while non-durable sales advanced 1.5 percent. Within the sales of non-durable goods, petroleum sales rose 4.3 percent.
