Unemployment aid hits 7-month low

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A man pauses by a window as job seekers wait to get information and drop off resumes during a job fair in Boston. Applications for unemployment benefits fell to 390,000 Thursday, Nov. 10. | AP Photo file

Updated: December 13, 2011 8:54AM

WASHINGTON — The outlook for American jobs and trade looked a little brighter Thursday, despite growing uncertainty overseas.

The number of people who applied for unemployment benefits last week fell to a seasonally adjusted 390,000, the Labor Department said Thursday. That’s the fewest since April.

The U.S. trade deficit narrowed to $43.1 billion in September, its lowest point of the year, the Commerce Department said. Foreign sales of American-made autos, airplanes and heavy machinery pushed exports to an all-time high.

The data suggest layoffs are easing and the economy grew slightly better over the summer than the government had estimated a month ago.

Stocks rose sharply Thursday, one day after the market tumbled nearly 400 points over concerns that Europe’s debt crisis could worsen.

The reports “are modestly strong relative to expectations — encouraging confidence that the economy is gaining a bit of momentum,” said Pierre Ellis, an analyst at Decision Economics.

Weekly applications for unemployment benefits have declined in three of the past four weeks, the Labor Department said. The four-week average, a less volatile measure, fell to 400,000, also the lowest point since April.

The downward trend in applications suggests businesses are laying off fewer workers. Still, applications need to consistently drop below 375,000 to signal sustained job gains. They haven’t been at that level since February.

“The labor market is still weak and quite stagnant but there are hopeful signs of some modest improvement,” said Steve Wood, chief economist at Insight Economics.

A separate report this week showed that employers advertised more jobs in September than at any other point in the past three years. That’s a positive sign for future hiring, since most companies typically take one to three months to fill vacant positions.

Still, the unemployment rate has been stuck near 9 percent for more than two years, and the Federal Reserve said last week that it is not expected to fall significantly through the end of next year.