US trade deficit narrows in Sept due to rise in exports Jobless claims fall 8,000 in latest week

WASHINGTON, Nov 8, (RTRS): The US trade deficit unexpectedly narrowed in September due to a sharp rise in exports, suggesting global demand for US goods was holding up despite the debt crisis in Europe.
Other data on Thursday showed a drop in new claims for jobless benefits last week, although a severe storm distorted the data.
The monthly trade gap fell in September to $41.55 billion, the smallest deficit since December 2010, the Commerce Department said.
The data is the latest positive sign for the economy, which has appeared to perk up as consumers spend more freely and home construction quickens. The trade report also showed an increase in imports of consumer goods.
“This was a very encouraging report as the improvement in both export and non-petroleum import activity suggest improving demand both domestically and globally,” said Millan Mulraine, an economist at TD Securities in New York.


Exports have been a driving force for America’s recovery from the 2007-09 recession and in September they rose by 3.1 percent, the biggest increase in more than a year.
Exports to the European Union, where a debt crisis has pushed several countries into recession, were flat compared to the prior month, although the government does not seasonally adjust figures for countries and regions as it does for overall imports and exports.
Analysts were expecting the trade gap would widen to $45.0 billion, and the decline suggested the US economic growth may have been faster in the third quarter than the 2.0 percent annual rate initially reported.
JPMorgan said the trade report pointed to a 2.8 percent growth rate. Analysts on Wall Street had previously increased their estimates for third-quarter growth following stronger-than-expected data on factory orders.
The Commerce Department will release a revised estimate for third-quarter growth on Nov 29.
US stocks were little changed, while prices for US Treasuries trimmed modest gains.


Imports
Many economists still think the chill falling over the global economy will increasingly weigh on the United States.
Moreover, the US economy could fall back into recession if Congress fails to avert a package of tax hikes and spending cuts planned for the new year. Fears over this so-called “fiscal cliff” appear to be hitting the economy already through reduced business investment.
US imports rose 1.5 percent in September. While imports subtract from growth, the data gave a positive signal for domestic demand. Imports of consumer goods rose by $2.7 billion.
Analysts pointed out that a good deal of this increase was because of the launch of a new iPhone model by Apple, which is imported. That suggests the increase in imports of consumer goods might prove temporary.


Oil imports fell In September. The average price for imported oil rose in September to $98.88 per barrel, but the quantity of oil imports dropped. A separate report showed the number of Americans filing new claims for unemployment benefits fell last week, although Superstorm Sandy roiled the data.
Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 355,000, the Labor Department said. That was below the median forecast in a Reuters poll of 370,000.
An analyst from the department said Sandy, a mammoth storm that slammed into the East Coast on Oct 29, boosted claims in some states by leaving people out of work, but also reduced claims in at least one state because power outages kept the state from collecting claim reports.


The impact of the storm is likely to be temporary. It was unclear if the storm’s net effect was to boost or reduce claims, the analyst said. He said the storm could continue to affect the claims report for several more weeks.
“It is pretty difficult to interpret,” said David Sloan, an economist at 4Cast in New York.
The storm killed at least 121 people in the United States and Canada and left more than 8 million homes and businesses without electricity in the Northeast.
The four-week moving average for jobless claims, which smoothes out volatility, rose 3,250 to 370,500. Economists generally think a reading below 400,000 points to an increase in employment.
Continuing claims for jobless benefits fell 135,000 in the week ended Oct. 27 to a seasonally adjusted 3.127 million, the lowest level since July 2008, the Labor Department said.

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