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Slightly fewer Americans filed for new unemployment benefits last week, a reassuring sign about the labor market in the closely watched economic reading.

The Labor Department reported Thursday that 367,000 filed new jobless claims in the week ended May 5, down from 368,000 the week before. The previous week reading was revised up by 3,000.

Economists surveyed by Briefing.com had forecast 365,000 would file for help.

There have been growing worries about a weakening of the recovery in the jobs market, especially after a disappointing April jobs report that showed employers adding far fewer jobs than expected.

Jobless claims, which had been falling steadily earlier this spring, also had climbed again in recent weeks before a drop two weeks ago.

The 86 million invisible unemployed

"The fact that claims continue to drift back toward pre-Easter levels provides important evidence that the level of activity in the labor market did not stall in recent weeks," said Joseph LaVorgna, chief economist at Deutsche Bank, in a note Thursday.

Hiring in a hurry picks up

Economist Michael Gapen of Barclays Capital said the latest reading shows that the improvement in the labor market seen earlier this year has not vanished, despite the temporary jump in new claims filings in April.

"The fact that initial claims held their decline last week is supportive of the idea that the recent softness in initial claims has reversed," Gapen said.

Initial claims can be a volatile reading, which is why economists prefer to look at the four-week average for claims. And that reading also improved slightly to 379,000 from 384,250.

Behind the jobs recovery

There were also 61,000 fewer people receiving continuing unemployment benefits, as that reading for the week ended April 28 — the most recent week available — fell to 3.23 million from 3.29 million.

"Continuing claims never altered their downward trend, even while initial claims were moving higher in previous weeks," Gapen said. "Normally, initial and continuing claims will exhibit similar movements when underlying trends in the labor market are shifting." 

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OAKVILLE, ONT.

Federal Reserve plans for rules on credit risk may hamper monetary policy in Japan and have an

There’s a rumble brewing over how you get your beer. And the newest front has opened right in the backyard of America’s biggest brewer.

Beer wholesalers — the people who truck the suds from brewery to store shelf — are pushing a bill in the Missouri Legislature that would protect their role as middlemen, by banning brewers from owning wholesalers and codifying the industry’s vaunted three-tier distribution system into state law.

It’s a pre-emptive strike against Anheuser-Busch InBev, which wants to streamline its complex distribution network, and a sign of increased tension between the big brewer and the people who deliver its product. The fallout from that dispute could eventually affect everything from the price of beer to what brands are on the shelf.

While state laws vary, the three-tier system — in which separate companies make beer, ship it, and sell it to consumers — has been in place since the end of Prohibition, when it was designed to rein in aggressive sales tactics and streamline regulation. The system is in sharp contrast to other consumer goods — Procter & Gamble, for instance, sells toothpaste and detergent straight to Walmart — and unique in the global beer industry.

Anheuser-Busch has more than 500 distributors across the country — five in the St. Louis area — nearly all of which are independent companies with an exclusive contract to sell A-B beer in a certain geographical area. It’s a lucrative franchise; distributors typically take about $4 per case, according to calculations by Beer Business Daily. And in recent years, the so-called “red network” of A-B wholesalers has won extra profits by shedding exclusivity agreements and carrying more craft beer, with higher margins and few extra costs.

But Anheuser-Busch InBev has started to push back, encouraging wholesalers to consolidate, urging tighter “alignment” with the brewery and blasting those who sell non-A-B products against A-B in neighboring markets.

“I’m loyal to my wholesalers,” A-B InBev North American president Luiz Edmond told the Wall Street Journal in March. “Why would I not expect the same loyalty to me?”

At stake is a lot of money.

Matter of efficiency

Wall Street analysts say more efficient distribution could play a big role in A-B InBev’s target of $1 billion in U.S. cost savings. By buying out the middleman and self-distributing, the brewery could tap wholesaler profits estimated at about $1 a case, and centralize functions such as phone operations and truck maintenance.

“It’s a good way to squeeze out costs,” said Harry Schuhmacher, editor of Beer Business Daily.

These kind of acquisitions are legal in about 20 states, and A-B InBev already owns 14 distributorships — which it calls “branches” — including some in big, if not especially profitable, markets such as New York and Los Angeles. It has bought two just since December, with a third deal pending in Seattle.

A-B InBev is likely to keep buying wholesalers where it can, and to encourage consolidation where it can’t, wrote Tony Bucalo, an analyst with the Spanish bank Santander, in a research note last month. All in a bid to drive down costs.

“We estimate that ABI could hypothetically control nearly 50 percent of its distribution, compared to 8 percent today,” Bucalo wrote. “We believe it will continue to move in that direction.”

But A-B’s “costs” are distributors’ profits, and distributors are pushing back.

Even as the brewer has talked of consolidation, wholesaler groups are resisting. They warn of job cuts and short-term profit-taking. They argue that the big brewer could restrict sales of other brands at its branches, making it harder for craft beers and imports to find a market.

Those arguments have gained traction in state legislatures no fax needed payday loans. In the past two years, laws banning self-distribution have been passed in Louisiana, Wisconsin, Nebraska and Illinois — where lawmakers acted after A-B InBev’s attempt to buy a majority stake in its Chicago distributorship prompted a federal lawsuit.

In Missouri, though, the idea has been a tougher sell. The big brewer’s clout in Jefferson City has long been the stuff of legend. Even today it wields considerable influence, employing nine lobbyists and doling out more than $340,000 in political donations statewide in 2011, according to the Missouri Ethics Commission.

Last year, a bill blocking brewery ownership of distributors went nowhere. So far this spring, it has received a hearing and the blessing of a committee in the Senate, but not in the House.

The bill’s sponsor, Sen. Mike Kehoe, R-Jefferson City, did not return calls seeking comment, nor did local Anheuser-Busch distributors, who have been silent on the matter. But Brian Gelner, vice president of Premium Beverage, a MillerCoors distributor in Springfield, and legislative chairman of the Missouri Beer Wholesalers Association, said he was hopeful that the bill would at least get to a full floor vote.

“The three-tier system has been a really good system,” Gelner said. “Anything that changes that by taking one tier out hurts the whole industry.”

Flexing muscles

A-B says it agrees on the value of three tiers, and insists it has no plans to buy Missouri wholesalers. But the brewery says it wants the option to do so if necessary, and is lobbying against the bill.

“We support keeping the existing system in place because it works and fosters competition,” said Mark Bordas, A-B’s regional vice president for state affairs, in a statement. “This system for many years has allowed for brewers to own a wholesaler in Missouri. If a wholesaler decides to sell, and if it makes sense for us to buy, our ability to own a wholesaler assures that our products are able to strongly compete.”

Some say this is a lot of fuss about very little.

Joe Thompson is president of Georgia-based Independent Beverage Group, which helps broker wholesaler acquisitions. When the owner of an A-B house wants to sell, he said, A-B is always a potential buyer — in the states where it’s allowed — but just one of many. And while the big brewer usually has right of first refusal in its network, distributors are free to take the best offer.

The real reason for all this push-back, Thompson said, is that many wholesalers don’t want to go up against the deep pockets of the brewery, which could easily undercut them on price.

“They’d rather compete against you or me than Anheuser-Busch,” said Thompson, who is representing Seattle-based K&L Distributors in its sale to A-B. “Fundamentally, it’s just that they don’t want a giant in their neighborhood.”

But others who have been watching this unfold say the distributors’ worries are well-founded.

From Chief Executive Carlos Brito on down, A-B InBev executives have made clear they have plans to save money on wholesaling, said John Conlin, a distribution consultant in Denver. And the more states where A-B owns wholesalers, the less leverage the stand-alone outfits will have.

Whatever happens in Jefferson City and elsewhere, Conlin said, the long-cozy relationship between the people who make Budweiser and the people who ship it is changing, perhaps for good.

“A-B has been flexing its muscles lately,” he said. “And there’s a lot of fear out there right now.”

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A U.K. factory index fell more than economists forecast in April and U.S. manufacturing probably slowed as the world economy stayed reliant on China to drive economic growth.

The gauge of British factory output dropped to 50.5 from 51.9 in March, London-based Markit Economics said today. The median forecast of 27 economists in a Bloomberg News survey was for a decline to 51.5. The Institute for Supply Management

Treasury 10-year note yields fell for the sixth week in a row, matching the longest streak since June, as slowing growth and concern Europe

From oil fields to wind turbines to coal mines, size and scale rule the economics of energy.

But the nuclear industry is thinking small these days.

The latest evidence came last week when Ameren Missouri and Westinghouse Electric Co. announced plans to pursue a $452 million federal subsidy to advance development of small modular reactors that could be built alongside the utility’s much larger Callaway nuclear plant near Fulton, Mo.

While some utilities are still pursuing full-scale plants, there is a parallel push for smaller reactors that could be easier for utilities to finance and minimize sticker shock for regulators and consumers. But despite a lower total cost, there’s no evidence yet that tiny fission factories would be able to produce electricity at a competitive cost in an era of abundant, cheap natural gas.

“There just isn’t any proof that small reactors are going to be any more economic than larger ones,” said Peter Bradford, an adjunct law professor at Vermont Law School and a former Nuclear Regulatory Commission member. “At this point, it’s all about hype and hope.”

The so-called small nuclear reactors promise the same benefits as larger ones: namely, an option for around-the-clock, low-carbon electric generation that could be a key in replacing aging coal plants.

For utilities considering nuclear technology, the smaller size means a smaller price. Even using the most generous cost estimates, a new nuclear plant the size of Ameren Missouri’s existing Callaway plant could rival or exceed the $7.5 billion market value of the utility’s entire parent company.

But the differences go beyond size. For one, the small reactors envisioned would be modular, able to be manufactured at a central factory, shipped by rail, ships or truck and assembled on site. That means a potentially larger market for vendors like Westinghouse.

“This (small) plant will appeal to a very broad market,” Kate Jackson, a Westinghouse senior vice president and chief technology officer said last week.

SEARCH FOR ALTERNATIVES

The pursuit of small reactors represents a new path to the oft-referenced nuclear renaissance.

It was only a few years ago that the industry focused strategy on certification of a few large reactor designs that would, in theory, eliminate the risk and uncertainty, cost overruns and construction delays that tainted the last nuclear plant boom.

While new reactors are going forward in Georgia and South Carolina, a full-tilt nuclear revival hit a wall for several reasons. Among them: the inability of utilities to finance projects that cost multiple billions of dollars.

In fact, more than half of the new reactors for which construction and operating licenses were sought have been deferred or cancelled, including Ameren Missouri’s proposed 1,600-megawatt Callaway 2 plant.

Andrew Klein, a nuclear engineering professor at Oregon State University, sees small reactors as part of a new strategy that could help utilities get over the hump by adding new capacity in small bites. They could then use revenue from the first small reactors to help finance subsequent units as more generating capacity is needed.

“It’s an entirely different business model,” he said.

The Obama administration, which is pushing for development of low-carbon energy technologies, sees potential, too. And the president wants the United States to take the lead in developing the industry.

Last month, Obama proposed $452 million to help speed up development of small modular reactors. The funding availability would come on top of $8 billion in loan guarantees for the Vogtle twin-reactor nuclear project in Georgia low fee payday loans.

The federal funding, which has yet to be appropriated by Congress, would support engineering, design certification and licensing of up to two plant designs that have the potential to be licensed and in commercial operation in a decade.

Westinghouse says it believes it has an advantage because the 225-megawatt reactor it’s developing is an offshoot of the company’s full-size AP1000 reactor that has already been certified by the Nuclear Regulatory Commission.

“The path from here to the end is shorter for us than anyone else,” Jackson said. No other vendor has been through the new licensing process and has technology that’s already been licensed.”

PIECE OF THE PIE

At least two other groups have indicated they will seek a share of the federal grant. Both are eyeing the Department of Energy-owned Savannah River site in South Carolina, and are being backed by NuHub, an economic development initiative in South Carolina.

Holtec International Inc. on Tuesday said it intends to seek a share of the federal funding to speed up development of its 160-megawatt small modular reactor. Two weeks ago, NuScale Power, based in Corvalis, Ore., announced plans to seek funding to accelerate development of its 45-megawatt nuclear modules at Savannah River site.

Other nuclear industry players are pursuing modular designs. And at least one other utility has publicly expressed interest in small reactors.

The Tennessee Valley Authority has said it is looking at Babcock & Wilcox’s small reactor design for a project on a utility-owned site near the Energy Department’s Oak Ridge National Laboratory.

For all the hype, small reactors, are still at least a decade away. And that’s if design, licensing and commercial development go at the pace hoped for by the nuclear industry.

And even then, the potential for small reactors hinges on how they compete in the energy marketplace. More than concerns about nuclear safety in the wake of Fukushima disaster in Japan or the dilemma of where to dispose of highly radioactive spent nuclear fuel, the technology’s future will be dictated by economics.

Jackson said Westinghouse aspires to make small reactors whose costs are equal to or less than full-size reactors.

For now, there’s no cost data for small reactors, and no firm evidence they will produce electricity at a lower price than larger plants.

“It’s too early to determine that,” Klein said. “We’re going to have to see some built.”

Ameren Corp. CEO Thomas Voss said at Tuesday’s shareholder meeting that if a new power plant was needed today, the lowest cost option would be a natural gas-fired power plant, not nuclear.

But gas prices have been especially volatile over the past several years. After spiking to more than $14 per thousand cubic feet in mid-2008, prices have plunged to less than $2 — the lowest level in about a decade.

That kind of volatility makes utilities hesitant to commit to natural gas-fueled power over the long haul, so Ameren continues to pursue nuclear development in Missouri to keep the option available in years to come, Voss said.

“We continue to believe nuclear power will to play a role in meeting Missouri’s energy needs,” he said.

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ST. LOUIS •Two Israeli citizens pleaded guilty Monday and were sentenced for sending more than 9,000 shipments of unapproved prescription drugs worth more than $1.4 million to the U.S., the U.S. Attorney’s office said Tuesday morning.

Benny Carmi, 58, was sentenced Monday afternoon to 10 months in prison, fined $30,000 and agreed to forfeit $50,000 for introducing misbranded prescription drugs into interstate commerce, smuggling prescription drugs into the United States, and selling counterfeit prescription drugs, prosecutors said..

Moshe Dahan, 37, was sentenced to a year of probation, fined $15,000 and agreed to forfeit $15,000 for smuggling prescription drugs.

Carmi and Dahan ran an online prescription drug business that operated under a number of names, including “allpillsrx.com,” “newpharm.net,” “pharmacy-online.com,” “pricepills.com,” and “pharmacy-pal.com,” prosecutors said. They have agreed to forfeit those names.

The websites sold popular drugs including those used to aid weight loss or treat erectile dysfunction, and did not require a prescription, prosecutors said.

But they were also selling drugs that were manufactured in unapproved plants and were not approved for sale in the U.S., prosecutors said, including some that were not of the full potency advertised, according to lab tests of drugs obtained through undercover purchases guaranteed unsecured personal loan.

They also hid the shipments from authorities by labeling them “gifts” and claiming that they had no value.

Dahan, also known as Mark Young, and Carmi sent just over 9,000 shipments of pharmaceuticals to customers, including almost 100 in Missouri.

After investigators traveled to Israel and executed search warrants related to the companies, Carmi and Dahan agreed to waive extradition and appear in U.S. District Court in St. Louis Monday to plead guilty and be sentenced with the help of a Hebrew interpreter.

“Counterfeit pharmaceuticals pose a very serious threat to our public health and safety,” said Gary Hartwig, head of Immigration and Customs Enforcement’s Homeland Security Investigations office in Chicago, which worked the case with the U.S. Food and Drug Administration’s Office of Criminal Investigations and Israeli police. “People shouldn’t have to put their health in jeopardy because they bought a prescription drug online that is fake, substandard, tainted or untested,” Hartwig’s prepared statement said.

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European stocks faltered Wednesday after two days of gains but Asian markets jumped on speculation Japan might take new measures to spur its economy.

Stocks in Europe recovered their poise this week after a run of losses, with sentiment bolstered by solid U.S. corporate earnings, a surprise improvement in German investor sentiment and relatively well-received Spanish bond auctions. An upward revision to the International Monetary Fund’s global growth forecast also underpinned confidence.

How European markets close out the week will depend on Spain’s ten-year bond auction on Thursday. If it goes badly, investors will likely fret once again about the country’s ability to get a handle on its debts.

Spain has become the main source of concern in Europe’s debt crisis as investors worry about the government’s ability to push through a raft of austerity measures at a time when unemployment stands at a startling 23 percent and the economy is in recession.

The yield on the country’s ten-year bond on Monday spiked above 6 percent, not far off the 7 percent rate that eventually forced Greece, Ireland and Portugal into seeking financial help from their partners in the eurozone.

In the past two days, however, it has edged back down to more manageable levels. On Wednesday, it was down a further 0.15 of a percentage point at 5.74 percent.

Despite the drop in the yield, Spanish stocks continued to oscillate wildly. On Wednesday, the main IBEX index down 2.2 percent. Elsewhere in Europe, the FTSE 100 index of leading British shares was 0.1 percent lower at 5,760 while Germany’s DAX fell 0.5 percent to 6,769. The CAC-40 in France was 1.1 percent lower at 3,254 poor credit personal loans.

The euro was also faring poorly in the risk-averse environment, trading 0.4 percent lower at $1.3074.

Wall Street was poised for modest losses at the open after registering one of its strongest gains in a month. How it will actually perform will depend on the next run of U.S. quarterly corporate earnings.

“With the U.S. earnings season in full flow, investors will be looking to see if earnings reports continue to beat expectations,” said Chris Beauchamp, market analyst at IG Index.

Earlier in Asia, sentiment was buoyed by indications that the Bank of Japan may do more to prop up the economy. Kyodo news agency reported that Deputy Governor Kiyohiko Nishimura’s suggested the central bank might take additional stimulus steps to tackle deflation.

That helped the Nikkei 225 index in Tokyo to soar 2.1 percent to 9,667.26 and the dollar to rise 0.5 percent to 81.46 yen.

Other stock markets were up too, including Hong Kong’s Hang Seng, which gained 1.1 percent to 20,780.73.

Mainland Chinese shares rose on hopes for financial reforms aimed at regulating private lending and creating new institutions to serve private borrowers better, analysts said. The benchmark Shanghai Composite Index rose 2 percent to 2,380.85. The Shenzhen Composite Index gained 2.1 percent to 956.49.

Oil markets were subdued, with the benchmark New York rate down 6 cents at $104.14 a barrel.

____

Pamela Sampson in Bangkok contributed to this report.

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