MNI DATA ANALYSIS: US Jobless Claims Rise 2k; 1Q ULC +2.7%>

--1Q Nonfarm Productivity +0.7%, Output +2.8%, Hours Worked +2.1%

--International Trade Gap -$49.0b in March, Census Goods Gap Now -$68.3b

--Initial Claims Four-Wk Average -7,750 To 221,500, Low Since March 1973 

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - Initial claims U.S. state unemployment benefits 

rose by only 2,000 to 211,000 in the April 28 week, well below the 

225,000 level expected by analysts in an MNI survey and suggesting that 

last week's dip to 45-year low was not a fluke, data released by the 

Labor Department Thursday showed. 

     In other data released at the same time, nonfarm productivity rose 

by 0.7% in the first quarter, a slightly smaller gain than the 0.9% rise 

expected. Unit labor costs rose by 2.7%, a slower pace than the 3.0% 

gain expected, but still up from the 2.1% increase in the previous 

quarter. 

     On a year/year basis, nonfarm productivity was up 1.3% in the first 

quarter, a slightly faster pace than the 1.2% year/year rate in the 

fourth quarter. Unit labor costs rose 1.1% year/year in the first 

quarter, slower than the 1.6% gain in the previous quarter. However, 

that slowdown was due in large part to base effects from a 4.8% 

quarter/quarter surge in the first quarter of 2017. 

     Also, the Commerce Department released the international trade data 

for March, which showed the overall goods and services gap narrowed to 

$49.0 billion from $57.7 billion in February. Analysts had expected the 

overall gap to narrow to $49.8 billion, based on a significant 

improvement in the advance trade goods gap. 

--CLAIMS FOUR-WEEK AVERAGE ANOTHER 45-YEAR LOW

     The four-week moving average for initial claims, which tends to be 

a better measure of the underlying trend of the data, fell by 7,750 to 

221,500 in the April 28 week a second straight decline that takes the 

average to its lowest point since the March 3, 1973 week, when it was 

slightly lower at 221,250. 

     Even that low could be breached next week. If the number of 

headline claims does not change next week and there are no revisions to 

data from the past four weeks, the four-week average will fall by 5,500 

as the 233,000 level in the April 7 week rolls out of the calculation. 

     Seasonal adjustment factors had expected a decrease of 7.7%, or 

15,470, in unadjusted claims. Instead, unadjusted claims fell by 14,016 

(7.0%) to 186,049. The current week's level was well below the 210,955 

level in the comparable week a year ago. 

     The only states where claims were estimated were again Colorado and 

Maine. However, the claims taking procedures in the Virgin Islands and 

Puerto Rico have still not returned to normal.   

--CONTINUING CLAIMS PLUNGE 

     The level of continuing claims fell by 77,000 to 1.756 million in 

the April 21 week, a third straight decline that returns the level to 

its lowest point since the December 8, 1973 week, when it was 1.717 

million. 

     Before seasonal adjustment, continuing claims fell by 129,463 to 

1.735 million, well below the 1.949 million level seen in the comparable 

week last year. 

     The four-week average for continuing claims, a more reliable 

measure when the continuing claims are rapidly moving week-to-week, fell 

by 15,500 to 1.833 million, the lowest point since the December 29, 

1973. 

     The seasonally adjusted insured unemployment rate fell to 1.2% in 

the April 21 week, down from 1.3% in the previous week and 1.4% in the 

same week a year earlier. 

     The unemployment rate among the insured labor force is well below 

that reported monthly by the Labor Department because claims are 

approved for the most part only for job losers, not the job leavers and 

labor force reentrants included in the monthly report. 

--NONFARM PRODUCTIVITY LIFTED BY SLOWER HOURS

     The output component of nonfarm productivity rose 2.8%, slower than 

the revised 3.7% increase in the previous quarter, while hours worked 

growth slowed even faster to 2.1% from 3.3%. 

     First quarter hourly compensation rose 3.4% after a 2.4% gain in 

the previous quarter, but real hourly compensation still fell 0.1% after 

a 0.8% decline in the fourth quarter, showing wage growth is still being 

outpaced by inflation. 

     Productivity growth was revised up to a 0.3% pace in the fourth 

quarter from the flat reading previously reported. At the same time, 

unit labor costs are now up 2.1% in the fourth quarter, compared with 

the 2.5% gain most recently reported. 

--GOODS TRADE GAP REVISED MODESTLY WIDER

     The census goods trade gap for March was revised slightly wider to 

$68.3 billion from the $68.0 billion gap previously reported that was 

used when calculating the advance reading for first quarter GDP, while 

the February gap was adjusted less than $0.1 billion narrower. As a 

result, the net export gap could be adjusted slightly wider in the 

second estimate for GDP. 

     Exports expanded to a record high $208.5b level on solid gains in 

capital goods (+$1.9b, aircraft +$1.9b) foods and feeds (+$1.0b), 

industrial supplies (+$0.9b), and consumer goods (+$0.1b), offset by a 

autos (-$0.6b). 

     Imports declined, with decreases in capital goods (-$1.5b), 

consumer goods (-$0.9b), industrial supplies (-$0.7b) and foods and 

feeds (-$0.4b). Auto imports (+$0.2b) posted a small gain. 

     The country data showed wider bilateral gaps with the EU, Mexico 

and Japan, but a smaller gap with China and a small surplus with Canada. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]