By Lucia Mutikani
WASHINGTON (Reuters) - The number of Americans filing applications for unemployment benefits increased more than expected last week, suggesting the labor market was slowing, but probably not to the extent implied by a near-stall in job growth in February.
While other data on Thursday showed import prices rising by the most in nine months in February, the trend in imported inflation remained weak. Import prices dropped on a year-on-year basis for a third straight month in February. The stream of data remains broadly supportive of the Federal Reserve's pledge to be "patient" before raising interest rates further this year.
"Right now the labor market looks distinctly cooler than it did last year," said Chris Rupkey, chief economist at MUFG in New York. "If Fed Chair (Jerome) Powell is waiting for inflation to pick up before resuming that gradual pace of rate hikes, today's (import prices) report isn't going to impress him much."
Initial claims for state unemployment benefits rose 6,000 to a seasonally adjusted 229,000 for the week ended March 9, the Labor Department said on Thursday. Data for the prior week was unrevised. The Labor Department said no states were estimated.
Economists polled by Reuters had forecast claims rising to 225,000 in the latest week. Claims have been hovering in the middle of their 200,000-253,000 range this year.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, slipped 2,500 to 223,750 last week.
The labor market is slowing as workers become more scarce. Hiring is also being constrained by a weakening economy as stimulus from a $1.5 trillion tax cut diminishes. Washington's trade war with Beijing, slowing demand overseas and uncertainty over Britain's exit from the European Union are also hurting economic activity.
The government reported last week that nonfarm payrolls increased by only 20,000 jobs in February, the weakest since September 2017, in part as payback after hefty gains in the prior two months. But the unemployment rate dropped two-tenths of a percentage point to 3.8 percent and annual wage growth was the strongest since 2009.
U.S. financial markets were little moved by the data on Thursday.
IMPORTED FOOD PRICES TUMBLE
In another report on Thursday, the Labor Department said import prices rose 0.6 percent last month, boosted by increases in the costs of fuels and consumer goods. That was the biggest gain since May and followed an upwardly revised 0.1 percent rise in January.
Economists polled by Reuters had forecast import prices rising 0.3 percent in February after a previously reported 0.5 percent drop in January.
In the 12 months through February, import prices fell 1.3 percent. That followed a 1.6 percent decline in January.
The report came on the heels of data showing tame producer and consumer inflation readings in February. The jump in the monthly import prices probably does not change economists' expectations that inflation will remain moderate through the first half of 2019, and allow the Fed to stay pat on interest rates. The U.S. central bank raised rates four times last year
Last month, prices for imported fuels and lubricants rose 4.9 percent after increasing 4.1 percent in January. Prices for imported petroleum increased 4.7 percent after rebounding 7.1 percent in January.
But food prices fell 0.8 percent in February after decreasing 0.4 percent in the prior month. Excluding fuels and food, import prices rebounded 0.2 percent last month after falling 0.3 percent in January.
The so-called core import prices fell 0.3 percent in the 12 months through February. Increases in core import prices have been curbed by last year's strength in the dollar. Prices for imported consumer goods excluding automobiles rose 0.3 percent in February, reversing January's drop.
The cost of goods imported from China were unchanged in February after dropping 0.3 percent in the prior month. Prices of Chinese imports dropped 0.7 percent in the 12-months through February, the biggest decline since October 2017.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)