(May 18) – ” Banks continue to tighten lending standards, a Federal Reserve survey found, but a Labor Department report turned up tentative signs that the job market may be stabilizing,” writes Nicholas Kulish in today’s Wall Street Journal..

“The Fed said its periodic survey of senior loan officers found 51% of lenders raising the bar for large and midsize corporate borrowers, those with annual sales of at least $50 million, and 36% toughening up on small businesses. Bankers blamed the stalling economy.

“While the fraction of banks that were tightening was off January’s peak of 60% for large and midsize firms and 45% for small firms, none of the 76 banks surveyed reported easing standards on commercial loans.

“The Fed also turned up signs of bankers’ reluctance to lend to companies that often borrow directly from investors by issuing IOUs known as commercial paper.

“‘Citing concerns about the credit quality of commercial-paper issuers, significant fractions of both foreign and domestic respondents indicated that they tightened standards and terms on these credit facilities over the past year,’ the report said.

“Demand for loans also was weaker; by a more than 5-to-1 ratio, banks that saw a change in commercial-loan demand reported large and midsize companies sought fewer loans.

“The top reasons: scaled-back capital spending and reduced financing needs for mergers and acquisitions.

“On the bright side, new claims for unemployment benefits fell for the second week in a row after climbing earlier in the spring.

“Claims drifted down by 8,000 last week to a seasonally adjusted level of 380,000, the government said. They fell by a revised 37,000 the week before.

“The four-week moving average, which smoothes out week-to-week fluctuations, dropped by 2,250 to 401,250 last week. A year ago, 280,000 new claims were reported.