WASHINGTON (AP) — Jobs are scarce and food prices are likely to stay high through next year, according to new data that reinforced evidence of a U.S. economy stuck in a weak patch.
There was some good news in the spate of reports released Thursday. The U.S. trade deficit narrowed in April after American companies sold more goods overseas and imports fell.
The second straight month of record exports helped Wall Street end its six-day losing streak. The Dow Jones industrial average rose more than 116 points in midday trading, and broader indexes also increased.
But most economists downplayed the impact of the smaller trade gap. They said it was mostly because of temporary factor and focused on other reports that suggest hiring could weaken and growth could slow.
"There is a significant slowdown going on," said Paul Dales, senior U.S. economist at Capital Economics. "The economy is unlikely to grow at a decent rate anytime in the next year or two."
Thursday's data showed:
— The number of people seeking unemployment benefits hardly changed for a second straight week, the Labor Department said. Applications ticked up 1,000 to a seasonally adjusted 427,000 last week. It marked the ninth straight week in which applications have been above 400,000. That trend represents a setback after applications had been declining all winter.
— A wet spring will likely cut the size of this fall's corn harvest and keep food prices high through 2012, the Agriculture Department said. That would limit consumers' ability to spend money on other goods. Consumer spending accounts for 70 percent of the U.S. economy.
— Exports of U.S. goods and services rose to a record $175.6 billion while imports dipped to $219.2 billion, the Commerce Department reported. But a key reason the U.S. trade deficit narrowed was a 25.5 percent decline in imports from Japan, which is recovering from the March 11 earthquake and tsunami. Most economists expect Japanese factories will rebound in the next few months. That should ease supply disruptions and boost imports.
— Wholesale companies added to their stockpiles in April for a 16th straight month, a separate Commerce report said. That boosted inventories to the highest level since October 2008, a sign that businesses in early spring were expecting stronger sales. But more recent data suggests that high gas prices have since weakened demand for manufactured goods, a trend that could shrink supply levels in the months to come.
Hiring has slowed at the same time that unemployment benefits have remained at elevated levels. Employers added only 54,000 net new jobs in May, the department said last week. That was much slower than the average gain of 220,000 per month in the previous three months. The unemployment rate rose to 9.1 percent.