ForexSpace.com - The number of America’s new jobless applicants inched down a tad last week, calming concerns that the country’s labor market was deteriorating after April's slugging employment growth. According to the Labor Department, fresh claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 367,000. The previous week's figure was revised up to 368,000 from the previously reported 365,000. The less volatile four-week moving average also fell by 5,250, to 379,000. Commenting, Wayne Kaufman at John Thomas Financial, said how the slight revision was as expected.

“I think what's going to happen is that any effects from the good weather,” said Kaufman, “which pulled forward some of the economic data from the spring and summer; that effect is going to gradually move out. We're in a slow-growth environment. Not a doom and gloom environment, but not a good one either,” concluded Kaufman.

Ben Bernanke last month said an unseasonably warm winter had probably brought forward some of the hiring by companies, artificially boosting payrolls in January and February. Thus, most economists who viewed the pull-back in similar terms to the Fed boss, believing the underlying pace of payrolls growth in fact to be around 175,000 - the monthly average for the past three months.

Whilst we’re on the subject of Ben Bernanke, he has – at the time of writing – just been addressing the markets by teleconference from Washington, saying that the U.S. banking system has made substantial progress toward becoming healthier since the financial crisis but noted there still were problem lending areas.

"Conditions in the banking system - and the financial sector more broadly - have improved significantly in the past few years," he told a banking conference in Chicago. The Fed Chairman also noted that the capital and liquidity positions of banks have been strengthened but said home mortgage lending continues to be very tight.

"Many factors suggest that this situation will be difficult to turn around quickly, including the slow recovery of the economy and housing market, continued uncertainty surrounding the future of the government-sponsored enterprises and cautious attitudes by lenders," he said. A return to the kind of lending standards that were prevalent before the 2007-2009 crisis would not be appropriate, added Bernanke, suggested conditions now were so tight that they were inhibiting lending.

So, while Bernanke’s comments combine with the fresh claims data suggests the U.S. economy remained on track for modest growth, a report from the Commerce Department, which demonstrated a widening in the trade deficit for March – suggests Q1 economic growth turned out to be a good deal less pacey than initially believed. Economists polled by Reuters had expected the trade gap to widen to about $50 billion. U.S. stock index futures briefly edged higher on today on the release of the figures. Meanwhile, the U.S. Treasury 30-year bond briefly extended price losses, while the greenback pared losses against the euro.

Drew Hillier. Editor