US jobless claims back to Jan level

THE number of US workers filing new claims for jobless benefits fell to the lowest level since January, however the seasonally adjusted data was distorted by an unusual pattern of layoffs in the automotive industry.

Economists watch the labour market closely for signs that the impact of the most severe recession in decades is fading, and worry that failure to curb unemployment that has risen to 9.5 per cent will thwart official efforts to stimulate growth.

The Labour Department tries to anticipate seasonal changes in jobless claims, such as the auto industry usually closing plants in July to retool for the new model year.

But the bankruptcies of American carmakers has distorted the normal pattern of plant closures.

Major American stock indexes rose on the jobs data, but later turned mixed. US government debt prices and the dollar were lower.

A separate report yesterday showed wholesale inventories fell again in May, but at a slower pace than in the previous month, keeping alive hopes for a rebound in stock-building that could aid growth in the remainder of 2009. Economists say large inventory liquidations will reduce economic growth in the second quarter, but lay the foundation for a recovery as firms replenish depleted stocks in anticipation that sales will pick up.