By Christopher S. Rugaber
AP Economics Writer
Washington — The picture of an economy growing modestly without producing inflation yet struggling to create jobs emerged from government reports Thursday.
The number of newly laid-off workers requesting jobless benefits fell slightly last week for the third straight time. But initial claims remain above levels that would signal net job gains.
New claims for unemployment aid fell 5,000 to a seasonally adjusted 457,000, according to the Labor Department. That nearly matched analysts’ estimates of 455,000, according to Thomson Reuters.
The four-week average of jobless claims, which smoothes out volatility, dropped to 471,250. Still, the average has risen by 30,000 since the start of this year. That’s raised concerns among economists that persistent unemployment could weaken the recovery.
The average number of weekly jobless claims remains above the 400,000-to-425,000 level that many economists say it must fall below before widespread new hiring is likely.
Initial jobless claims are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire. High unemployment has persisted even though the economy grew in the second half of last year.
Separately, the Labor Department reported consumer prices were flat in February. A rise in food prices was offset by a drop in gasoline and other energy costs. Excluding the volatile food and energy categories, the core Consumer Price Index edged up just 0.1 percent last month, matching economists’ estimates.
The report adds to evidence that the weak economy has all but erased inflation. That allows the Federal Reserve to continue its efforts to revive the economy by keeping the short-term interest rate it controls at a record low near zero.
In another report, the Conference Board’s gauge of future economic activity rose just 0.1 percent in February, suggesting slow growth this summer. The gain in the index of leading economic indicators was the smallest in 11 months.
The index is intended to forecast economic activity in the next three to six months based on a variety of economic data.
Also, the current account trade deficit widened in the fourth quarter, according to the Commerce Department, reflecting an improving economy. Imports of oil, autos and other products outpaced gains in U.S. exports. But the trade gap for all of 2009 fell to its lowest point in eight years.
Economists say they think the deficit will widen during 2010, though not to the record heights seen before the recession.
The current account is the broadest gauge of trade because it includes not only trade in goods and services but also investment flows among countries. It measures how much the country must borrow from foreigners.