US weekly jobless claims fall 9,000; import prices unchanged in March

New applications for US unemployment benefits fell last week, pointing to sustained labour market strength despite a sharp slowdown in job growth in March.

Other data on Thursday showed import prices were unexpectedly flat in March as a drop in the cost of petroleum products was offset by increases in the prices of food and a range of other goods. A tightening labour market is expected to boost wage growth and help drive up inflation this year.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 233,000 for the week ended April 7, the Labor Department said. Economists polled by Reuters had forecast claims falling to 230,000 in the latest week.

Claims tend to be volatile around this time of year because of different timings of the Easter and school spring breaks, which can throw off the model that the government uses to smooth the data for seasonal fluctuations.

The economy created 103,000 jobs in March, the fewest in six months. Economists largely dismissed the slowdown as payback after hefty job gains in February. They also blamed cooler temperatures for the moderation in hiring.

The labour market is considered to be near or at full employment. The unemployment rate is at a 17-year low of 4.1 percent, not too far from the Federal Reserve's forecast of 3.8 percent by the end of this year.

Minutes of the U.S. central bank's March 20-21 policy meeting published on Wednesday offered an upbeat assessment of the jobs market, noting that "most participants described labour market conditions as strong."

The minutes also highlighted growing labour shortages saying "in some districts, reports from business contacts or evidence from surveys pointed to continuing shortages of workers in segments of the labour market."

The Fed raised interest rates last month and forecast at least two more rate hikes this year.

The four-week moving average of initial claims, viewed as a better measure of labour market trends as it irons out week-to-week volatility, rose 1,750 to 230,000 last week.

The dollar held gains versus a basket of currencies after the data while prices for U.S. Treasuries fell slightly.

Cheap petroleum

In a second report on Thursday, the Labor Department said March's unchanged reading in import prices was the weakest since last July and followed a 0.3 percent increase in February.

Economists had forecast import prices gaining 0.2 percent in last month. In the 12 months through March, import prices increased 3.6 percent, the biggest gain since April 2017, after advancing 3.4 percent in February.

Last month, prices for imported petroleum decreased 1.3 percent after falling 0.8 percent in February. Excluding petroleum, import prices gained 0.1 percent in March after climbing 0.4 percent in the prior month. These prices have risen strongly this year, reflecting the dollar's depreciation against the currencies of the United States' main trading partners.

Import prices excluding petroleum rose 2.1 percent in the 12 months through March. Data on Tuesday showed a broad increase in producer prices in March. The steady rise in import prices excluding petroleum and producer prices suggest that an energy-driven drop in consumer prices in March was probably temporary.

Economists expect inflation will accelerate this year, boosted by a tightening labour market, weaker dollar and fiscal stimulus. Inflation has undershot the Federal Reserve's 2 percent target since mid-2012.

The cost of imported food increased 0.6 percent in March, while prices for imported capital goods gained 0.2 percent. There were also increases in the prices of imported building materials and unfinished metals related to durable goods.

The price of goods imported from China edged up 0.1 percent in March, rising for a second straight month. Prices for imports from China increased 0.2 percent in the 12 months through March.

The report also showed export prices rose 0.3 percent in March after increasing 0.2 percent in February. Export prices advanced 3.4 percent on a year-on-year basis after rising 3.2 percent in February.

The price of agricultural exports surged 3.4 percent, the biggest increase since August 2012, boosted by a 7.8 percent jump in soybean prices and an 8.0 percent rise in wheat prices. Agricultural export prices rose 0.6 percent in February.