US jobless claims dip in latest week; goods trade deficit widens in July

Aug 27 (Reuters) - The number of Americans seeking unemployment benefits for the first time fell for a second week while the overall number of people on jobless relief rolls slid to the lowest level in a month, signaling a stable labor market that should give the Federal Reserve leeway to focus on containing inflation.

Meanwhile, the U.S. trade deficit ‌in goods, which President Donald Trump is trying to reduce through his aggressive use of tariffs on imported goods, was the widest in 16 months in July as exports fell for ‌a third straight month and capital goods imports surged on the back of the artificial intelligence build-out. The wider goods trade gap last month puts trade on track to be a net drag on U.S. gross domestic product growth for a fourth straight quarter.

Initial claims ​for state unemployment benefits fell 4,000 to a seasonally adjusted 203,000 for the week ended August 22, the Labor Department said on Thursday. Economists polled by Reuters had forecast 208,000 claims for the latest week.

Claims are hovering in the lower end of their 189,000-230,000 range for this year, indicating that layoffs remain low even if hiring is soft. Despite a surprise drop in employment in July, the U.S. jobless rate ticked down again to 4.1%, a historically low level.

The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, fell 18,000 to a seasonally adjusted 1.778 million during the week ended August 15, the claims report showed. The continued ‌claims data covered the survey week for the monthly nonfarm payrolls report for ⁠August.

Thomas Simons, chief U.S. economist at Jefferies, said recent data from payroll processor ADP and labor market analytics firm Revelio "paint a picture of a labor market that is in better balance than what is implied by the more volatile BLS (Bureau of Labor Statistics) numbers."

"There is a modest, steady pace of private sector job creation that is ⁠right in line with the amount necessary to keep the unemployment rate steady," Simons said. "Businesses are replacing workers who leave, mostly driven by retirements, and the modest pace of payroll expansion beyond is in line with the modest pace of labor force growth."

Labor market stability, if sustained, gives the Fed headroom to keep its focus on containing inflation that has run above its 2% target for 65 straight months.

Thursday's data came as Fed policymakers and other ​global ​economic officials were gathering in Jackson Hole, Wyoming, for the Kansas City Fed's annual economic symposium, where U.S. central bank ​Chairman Kevin Warsh will deliver a keynote address on Friday morning. Warsh, who so ‌far in his young term has shied away from commenting specifically on the state of the economy and direction of Fed policy, is under pressure to address a central issue: Is current inflation a problem or not, and what should be done about it?