1 of 2. People wait in line to enter a job fair in New York August 15, 2011.

WASHINGTON | Thu Oct 11, 2012 8:36pm EDT

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits slid last week to the lowest level in more than four and a half years, according to government data that may provide a boost to President Barack Obama a month before voters go to the polls.

The Labor Department report on Thursday was the latest data to suggest improvement in the jobs market, though the surprisingly large 30,000 drop in new claims may have reflected distortions due to seasonal adjustments that are likely to be smoothed out in coming weeks.

"The overall trend seems to be that the labor market is improving," said Brian Kim, a currency strategist at RBS Securities in Stamford, Connecticut.

A Labor Department analyst said seasonal factors had predicted a very large increase in claims last week, which he said would be typical for the first week of the quarter. Unadjusted claims did rise, but far less than expected, resulting in the sharp drop in the seasonally adjusted figure.

He noted that one state reported a decline in claims last week when a rise had been expected. No states had been estimated for the report, he said.

"We will likely see some payback in the claims data reported next week. But through this potential volatility, it does look like the trend in the claims is improving somewhat," said Daniel Silver, an economist at JPMorgan.

Silver said that California, given its large population and past "massive swings" in its claims data, was probably the state that caused the sharp drop in the seasonally adjusted figure.

But Pam Harris, director of the California Employment Development Department, said the state was not to blame.

Harris said California had reported all its unemployment insurance claims data on time. She said a published report stating it had not was "incorrect and inaccurate."

A second Labor Department official said "a processing issue" resulted in the state, which he did not identify, reporting fewer claims than expected.

"We cannot dictate to a state how they process their claims ... This is one of the years they happened to be behind everyone else," he said, adding the Columbus Day holiday this week may have been one factor.

"This individual state, whenever there are increases in claim, usually range from 15,000 to almost 20,000," he added.

The jobs data was tempered by a second report on Thursday that hinted at weaker U.S. and global demand.

The U.S. trade deficit widened in August to $44.2 billion, as U.S. goods exports fell for the fifth consecutive month and imports declined fractionally.

Initial claims for state unemployment benefits fell to a seasonally adjusted 339,000, the lowest number of new claims since February 2008, about a year before Obama took office in the midst of the global financial crisis.

Economists polled by Reuters had forecast claims edging up to 370,0000 last week.

Zach Pandl, strategist at Columbia Management in Minneapolis, said "you do have to be cautious about possible distortions. But with that caveat, the jobless claims numbers have been modestly encouraging over the last few weeks."

The four-week moving average for new claims, a better measure of labor market trends, fell 11,500 to 364,000, the lowest in six months.

U.S. stocks rose in response to the jobs data, while Treasury debt prices slipped and the dollar was lower against a basket of currencies.

A government report on Friday showed employers added a modest 114,000 jobs to payrolls in September but the unemployment rate dropped sharply to 7.8 percent, also the lowest level since Obama took office.

Former General Electric Chief Executive Jack Welch and others suggested last week the payrolls data was fixed to make Obama look better ahead of the election, a charge the Labor Department strongly denied.

Obama's opponent, Republican Mitt Romney, has accused the president of mishandling the economy.

Thursday's claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell to 3.27 million in the week ended September 29, the latest data available. It was the lowest since May.

DECLINING TRADE

A Reuters poll on Thursday showed economists were slightly less optimistic about U.S. growth, lowering their median growth forecasts to an annualized 1.6 percent for the first quarter of 2013, compared to 1.7 percent last month.

The group of more than 70 respondents also trimmed their second-quarter forecasts to 2.1 percent from 2.3 percent, suggesting the U.S. economy will continue its slow, steady plod despite a recession in Europe, a slowdown in China and more restrictive fiscal policy at home.

The monthly trade deficit increased to $44.2 billion in August, from an upwardly revised estimate of $42.5 billion in July, the Commerce Department said. Analysts were expecting an August trade gap of about $44.0 billion.

Overall U.S. exports dropped 1.0 percent as troubles in Europe continue to weigh on global growth, while imports fell 0.1 percent in a sign of faltering U.S. demand for consumer products, autos and capital goods.

"It looks like net exports will contribute negatively to GDP (gross domestic product) growth, subtracting as much as half a percentage point," said Michael Moran, chief economist at Daiwa Securities America in New York.

A separate Labor Department report showed that overall U.S. import prices rose 1.1 percent for the second consecutive month in September, while U.S. export prices rose 0.8 percent.

(Additional reporting by Gertrude Chavez-Dreyfus and Ellen Freilich in New York; Editing by Andrea Ricci, James Dalgleish and Lisa Shumaker)

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A ''for sale'' sign is seen outside a home in New York June 19, 2012. U.S. housing starts fell in May from a 3-1/2 year high, although permits to build new homes rose sharply, suggesting a nascent housing recovery remains on track.

NEW YORK | Tue Oct 9, 2012 9:48am EDT

NEW YORK (Reuters) - The number of U.S. homes that could soon come onto the market fell to the lowest in more than three years as of July as distressed sales offset new delinquencies in an encouraging sign for the housing market, a data analyst firm said on Tuesday.

The pending supply of homes, also known as shadow inventory, fell to 2.3 million units as of the end of July, down 10.2 percent from 2.6 million units a year ago and at the same level as March 2009, CoreLogic said. The July data is the most recent available.

Shadow inventory includes the number of properties that are seriously delinquent or behind with loan payments, in foreclosure or held by lenders and servicers but not currently listed on the market. At the end of July it was equal to about six months' supply, CoreLogic said.

While many economists believe the housing market has finally turned a corner as prices have stabilized, the sector still faces many challenges including the swollen pipeline of foreclosures that need to be absorbed by the market.

A decline in shadow inventory should help the nascent recovery as fewer properties coming onto the market means less downward pressure on prices.

"Broadly speaking, the shadow inventory continued to shrink in July," Anand Nallathambi, chief executive of CoreLogic said in a statement. "This is yet another hopeful sign that the housing market is slowly healing."

Of the properties in shadow inventory, one million homeowners were 90 days or more behind on their mortgage payments, considered to be seriously delinquent. As well, 900,000 homes were in some stage of foreclosure, and 345,000 had already been seized by the banks.

The dollar volume of shadow inventory was $382 billion, down from $397 billion a year ago.

CoreLogic revised its methodology for the report and updated previous figures.

(Reporting by Edward Krudy; Editing by James Dalgleish)

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NEW YORK | Fri Sep 28, 2012 5:45pm EDT

NEW YORK (Reuters) - Tim Buckley, who takes over as chief investment officer at The Vanguard Group in January, has never managed money in his 20 years at the firm. He has no plans to make big market calls and he won't micro-manage his team's thinking or strategies.

There isn't any of the swagger you might expect from a guy charged with running the money at the No.1 U.S. fund company. Instead, the 43-year-old father of three says his top priority is to focus the firm's 300-strong group of portfolio managers, analysts and traders to be more efficient.

That's something Buckley says is crucial to help Vanguard maintain its place as the lowest-cost provider of mutual funds and exchange-traded funds. "There is only one firm that is lowest cost," Buckley said.

Vanguard's approach, whether seen as cheapskate or value for money, has helped the firm surpass rival Fidelity Investments to become the largest U.S. provider of open-end and closed-end mutual funds and ETFs. Vanguard, based in suburban Philadelphia, has $1.9 trillion in mutual fund, closed-end and variable annuity assets, up from $1.33 trillion five years ago, according to Lipper, a unit of Thomson Reuters.

Vanguard offers actively-managed equity funds - most are managed by outside firms like Wellington Investments and PRIMECAP Management Company. But its bread and butter has been in passive management, which has been popular in recent years after many active managers failed to deliver returns.

"Vanguard owns the low-cost attribute in the public's minds," said Don Phillips, president of Morningstar's investment research division. "Whereas Fidelity wanted to own equity performance, Vanguard wanted low cost, and that gave it a leg up."

Much of Vanguard's recent growth has come from its exchange-traded fund business. The firm's U.S. market share in ETFs has increased 29 percent in the past two years. It now holds 17.9 percent of the market, whittling away at the dominance of competitor BlackRock Inc, which has seen its market share fall to 40.6 percent from 46.6 over the same period.

BlackRock and others are slashing costs on ETFs to match or undercut Vanguard. Early in September, BlackRock's Chairman and CEO Laurence Fink announced that the firm will lower expenses on a number of its ETFs to better compete with Vanguard. And on September 20, Charles Schwab Corp. chopped fees by as much as 59 percent on its ETFs - with some being offered at a mere 7 cents for each $100 invested.

On average, Vanguard's ETFs cost 17 cents for every $100 invested, with the cheapest ETF costing 5 cents for $100 invested.

Buckley, who was on Harvard University's premier rowing team all four years, welcomes the competition and has no intention of giving up ground over prices.

"If you undercut us today, be prepared to do it again tomorrow," he said. "We won't just lower costs on one or two funds, we will do it across the board."

Since most of Vanguard's funds track indexes, having an investing expert as chief investment officer may not be necessary. What's more, Buckley's razor sharp focus on the bottom line may be exactly what Vanguard needs right now, Phillips said.

HOMEGROWN CIO

Buckley, who has held a variety of roles at Vanguard - including chief information officer and head of the retail group - will be fighting the market share battle while also trying to maintain Vanguard's no-frills culture. It's something firm founder Jack Bogle worries could be impeded by Vanguard's growth and size.

"With bigness you can get bureaucracy and complacency," said Bogle, emphasizing the importance of Vanguard remaining "a place where judgment has a fighting chance against process." Bogle, who retired from Vanguard in 1996, continues to give speeches and write books emphasizing the importance of long-term investing and sharing his views about the state of the mutual fund industry.

During his senior year at Harvard, Buckley, who majored in economics, considered pursuing a career in medicine like his mother, a nurse, and his father, who headed the cardiac surgical unit at Massachusetts General Hospital.

But then he met Bogle, and he realized he could go into finance and serve a purpose. As CEO Bogle's assistant, Buckley handled a number of projects, including helping Bogle research his first book. Buckley returned to Harvard for an M.B.A., but came back to Vanguard after graduation.

His next job was to help create a competitive analysis for Vanguard, detailing - and tracking - the firm's main rivals. That project gave Buckley perspective on how industry players compete and what gave Vanguard's model as a mutual company an advantage, he said.

Vanguard is owned by its customers, with profits invested back into the business. That makes it nearly impossible for publicly-traded competitors who answer to shareholders to compete on cost, experts said.

Vanguard is trying to maintain its pricing edge while also growing around the world. Over the past five years, the firm has gone from 12,000 employees in just six offices to 13,500 employees in 15 offices worldwide.

Since June, Buckley, who gets up every morning at 5 a.m. to ride a few miles on his bike before work, has been traveling to Vanguard's offices around the world to observe traders and managers at work so that he could find ways to increase efficiency.

He has identified that in certain regions the real-time systems Vanguard used to get cash flow into the funds are not necessarily being used in all of Vanguard's international locations.

Vanguard is in the middle of an effort to standardize its investment management IT across the globe.

Buckley's other priorities center around developing the firm's managers and establishing global best practices around that process.

Buckley's previous experience as chief information officer and head of Vanguard's information and technology division will help a lot in combating inefficiencies that crop up in global organization, said Gus Sauter, who Buckley is replacing as chief investment officer.

"My strength was more on growing the business and his strengths are more on managing a business," said Sauter, who is retiring after 25 years.

In some ways, Buckley's biggest challenge is to make sure he doesn't mess up a good thing, said Dan Wiener, who runs a newsletter for Vanguard investors.

"The biggest mistake they could make is to try to change anything," he said.

(Reporting By Jessica Toonkel; Editing by Jennifer Merritt, Lauren Young, Martin Howell, Bernard Orr)

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