Stocks trading lower as claims for unemployment benefits rise
NEW YORK -- Stocks slid Thursday as disquieting economic data in the U.S. and from Europe and Asia, pushed global markets downward.
The Labor Department reported Thursday that the number of Americans seeking unemployment benefits fell only slightly last week to a seasonally adjusted 382,000, painting a bleak landscape for job hunters.
When unemployment applications consistently top 375,000, it typically suggests hiring is too weak to lower the unemployment rate.
It's all about jobs. Too many Americans are out of work. The 8.1% unemployment rate is too high.
"For the foreseeable future," notes Jim O'Neill, chairman of Goldman Sachs Asset Management, "every Thursday's weekly job claims and each month's first Friday payrolls and unemployment data take on even more importance. Plain and simple."
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Federal Reserve Chairman Ben Bernanke said so last week. Not only did Bernanke launch a third round of Fed-driven stimulus to get the economy moving again, the nation's most powerful banker also said he would keep the stimulus spigot open until the sick job market recovers fully.
New data from the Conference Board later Thursday is expected to show a lackluster first half of the year in the U.S. Economists predict the board's Index of Leading Indicators will reveal a sluggish first half of the year and that a forward-pointing index showed little strength in August.
Overseas, a day after announcing aggressive measures to revive exports, Japan posted a $9.6 billion trade deficit as shipments to beleaguered Europe and Asia shriveled.
Japan has found itself in a tough position, with the strong yen hammering its biggest exporters at the same time that it is forced to import more energy following last year's disaster at the Fukushima Dai-ichi nuclear plant.
The 754.1 billion yen ($9.6 billion) deficit in August was smaller than the $9.9 billion deficit reported a year earlier, Japan's Finance Ministry reported.
Though the deficit was lower than some analysts had forecast, the Japanese economy is under threat from tenacious weakness in Europe and an ongoing confrontation with China, Japan's biggest single overseas market. And China, the world's second largest economy, is facing its own problems.
A business survey showed that China's manufacturing contracted again in September. The country this month revealed that overall economic growth had fallen to a three-year low during the three months ending in June. That is expected to decline further this current quarter.
Economists in Europe were surprised Thursday by a closely watched survey from financial data company Markit. Its purchasing managers' index, a gauge for European Union business activity, slipped to 45.9 in September, from 46.3 the previous month.
That's the lowest in over three years, even with easing in the rate of economic contraction in Germany, the continent's economic powerhouse.
Contributing: The Associated Press
