Official figures show that new claims for US unemployment benefits fell last week but the decline was much smaller than expected as the country's labour market struggles to recover.
Initial jobless claims dropped to a seasonally adjusted 403,000 in the week ending April 16, down 13,000 from the previous week's revised number of 416,000, the Labor Department said.
The average analyst estimate was for new claims to return below the 400,000 level - falling to 390,000 - after an unexpected jump in the previous week.
But the four-week moving average, which helps to even out week-to-week volatility, held below 400,000 for the eighth consecutive week, although it rose by 2,250 new claims to 399,000.
The weekly claims data still pointed to a gradual improvement in the depressed jobs market, where 13.5 million people are out of work. In March the unemployment rate fell to 8.8% from 8.9% in February, thanks to strong job creation in the private sector.
Separate figures from a private research group showed that a measure of future economic activity rose 0.4% in March, the ninth straight monthly increase.
The gains in the index suggest that the US economy will strengthen as summer approaches, despite rising oil and food prices and the impact of the earthquake in Japan, the world's third-largest economy.
The Conference Board's index of leading economic indicators began moving sharply higher last autumn as the jobless rate dropped and the stock market rallied. It had risen a revised 1% in February.
In March, it was boosted by signs of growing demand in the US manufacturing sector and a rebound from a five-decade low in building permits, which signal future construction in the housing market.
Trichet confident on US budget deficit
The head of the European Central Bank, Jean-Claude Trichet, said today he was confident that the US could correct its budget deficit.
'I have confidence that the US can correct its budget situation,' Trichet told French radio, referring to recent statements by the US administration.
The scale of the US budget deficit and debt was put in the spotlight on Monday when credit rating agency Standard $ Poor's downgraded its outlook on its borrowings to 'negative' from 'stable,' its first ever US sovereign downgrade action. S&P also warned it could actually cut outright its top 'AAA' rating for the US unless Washington can agree on how to stabilise the strained public finances by 2013.
The chief economist at the International Monetary Fund, Olivier Blanchard, said yesterday that the US lacked a credible plan to reduce its budget deficits in the medium term.
The US budget deficit is expected to reach about $1.6 trillion (€1.1 trillion) this year. The IMF calculates that this represents 10.8% of GDP, way above the 3% limit generally believed to be acceptable and which is used by the European Union.
Total accumulated US debt already exceeds $14 trillion and is set to exceed 100% of GDP in 2012 on IMF estimates.
