U.S. economic data was reported on the weak side Thursday, with jobless claims and trade deficits both growing.

The Labor Department said that the number of American workers filing first-time applications for unemployment benefits rose to a two-month high last week.

Employers are still reluctant to hire new workers despite recent indications of economic growth. Initial jobless claims increased by 3,000 to 422,000, the third consecutive weekly increase.

Worse still, last week’s numbers were revised higher to 419,000 from 413,000. “This is against consensus expectations that had called for an improvement to about the 400,000 mark and will be negatively interpreted today,” said RBC Financial, noting that the four week moving average and continuing claims, both increased.

In a separate release, the U.S. Commerce Department said reporting that the U.S. trade gap widened in July as purchases of foreign goods and services climbed to their second highest level on record. The U.S. deficit in international trade rose to US$40.32 billion from US$40.04 billion in June.

RBC said that this was higher than the previous month, but in line with consensus expectations.

BMO Nesbitt Burns observed that imports rose 1.6% to the second highest level on record in July. “Oil and consumer goods accounted for the increase in imports reflecting higher prices for crude and the pickup in the pace of U.S. economic growth,” it says.

Exports grew by 2.0% and expanded faster than imports for the third straight month.

“The trade deficit in July was below the average reading for the second quarter and should therefore be a net positive for third quarter GDP growth,” Nesbitt said.