(Adds consumer credit data)
* Jobless claims fall 12,000 in latest week
* Four-week moving average of new claims rises to 377,750
* Bernanke offers little hint more easing is imminent
By Jason Lange
WASHINGTON, June 7 (Reuters) - The number of Americans
lining up for new jobless benefits fell last week for the first
time since April, a hint that a slowdown in hiring last month
may only be temporary.
The data on state unemployment claims, released by the Labor
Department on Thursday, takes some of the edge off a report by
the government last week that showed job creation slowed sharply
Many economists believe mild weather in the winter led
employers to hire more workers then at the expense of spring,
but the weather effect should be temporary. Some economists
suggested the claims data backed that view.
It "gives us more confidence that the trend in payrolls is
stronger than the May payroll data implied," UBS said in a note
Four consecutive months of slowing job creation had fueled
speculation the Federal Reserve would ramp up efforts to prop up
the U.S. economy.
However, in congressional testimony on Thursday, Fed
Chairman Ben Bernanke offered few hints that further monetary
stimulus was imminent, even though he said the U.S. central bank
was ready to shield the economy if financial troubles mount.
The Labor Department said initial claims for state
unemployment benefits dropped by 12,000 to a seasonally adjusted
377,000 last week. That was spot on the median forecast in a
"If the economy were really swooning because of events in
Europe, it should be accompanied by a backup in jobless claims,"
said Carl Riccadonna, an economist at Deutsche Bank in New York.
Prior to last week, claims had risen for four consecutive
weeks, adding to concerns over several months of lackluster
hiring data. While the United States emerged from a deep
recession three years ago, the jobless rate has remained
stubbornly high. In May, it edged up to 8.2 percent.
Still, most of the recent increases in new jobless claims
were marginal, and the overall level of new aid applications has
held at levels consistent with a modest labor market recovery.
"I think the Fed looks at it and certainly leaves the door
open for further action, but it is not a ringing bell that it
should take action right now," said Peter Jankovskis, an
investment officer at Oakbrook Investments in Lisle, Illinois.
U.S. stock prices pared gains following Bernanke's comments,
but remained in positive territory, with sentiment bolstered by
a decision by China's central bank to cut bank lending and
deposit interest rates.
Last week's decline in U.S. jobless claims was the first
drop since the week ended April 28. The four-week moving average
for new claims, a measure of labor market trends, increased by
1,750 last week to 377,750.
The government said on Friday that job growth slowed in May
for the fourth straight month, heightening concerns that the
deepening debt crisis in Europe and a slowdown in China were
starting to dampen an already lackluster U.S. recovery.
Bernanke said the hiring slowdown could reflect the warm
winter weather or, more troublingly, suggest the economy was
simply growing too slowly to make a big dent in unemployment.
A separate report from the Fed showed American families
continued to shed debt in the first quarter. Efforts by U.S.
households to dig out of a big debt pile have been a persistent
headwind for the economy.
Total household debt dropped for the 16th straight quarter,
declining at a 0.4 percent annual rate. Mortgage debt, which is
the biggest component of consumer debt, fell at a 2.9 percent
annual rate, while consumer credit rose by 5.8 percent during
the quarter. A separate Fed report pointed to some shakiness in
borrowing, with consumer credit expanding in April by the least
in six months.
On a brighter note, the Fed said household wealth increased
by $2.8 trillion during the period, largely because of higher
prices in the stock market. That extra wealth could help
families feel a little more comfortable spending money, which in
turn could help the economy.
(Additional reporting by Rodrigo Campos in New York; Editing by
Andrea Ricci, Chizu Nomiyama, Leslie Adler and James Dalgleish)
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