A few bright spots

WASHINGTON – Fewer people applied for unemployment benefits last week, an encouraging sign that the job market may be slowly improving.

The number of applications dropped by 22,000 to a seasonally adjusted 405,000, the Labor Department said, the lowest level in almost three months. The total would have been even lower if Minnesota’s government wasn’t shut down. That caused 11,500 state workers to file applications last week, the department said.

Separately, U.S. companies paid less for raw materials and factory goods in June. The decline in wholesale prices was driven by the steepest fall in energy prices in nearly two years. Gas prices dropped by the most since last May, the Labor Department said.

Falling gas prices also held back retail sales in June, even as consumers spent more on cars and in big chain stores. The Commerce Department said retail sales rose a modest 0.1 percent. An easing of supply chain disruptions lifted auto sales 0.8 percent.

Investors appeared encouraged by the modest growth. The Dow Jones industrial average climbed more than 78 points in early-morning trading.The economy expanded only 1.9 percent in the January-March period, and most economists believe it grew at a similarly weak pace in the April-June period.