Trade deficit narrows; U.S. resists global chill
WASHINGTON — The trade deficit unexpectedly narrowed in September as exports rose sharply, suggesting global demand for American goods was holding up despite a debt crisis in Europe.
Other data on Thursday showed a drop in new claims for jobless benefits last week, although a severe storm that battered the East Coast distorted the figures.
The trade gap shrank 5.1 percent to $41.55 billion, the smallest deficit since December 2010, the Commerce Department said.
Economists had expected it to widen to $45.0 billion.
Exports jumped 3.1 percent, the biggest increase in more than a year. The export gain more than offset a 1.5 percent increase in imports that was centered on purchases of consumer goods.
The data was the latest positive sign for the economy, which has appeared to perk up as consumers spend more freely and home construction quickens.
“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.
Chinese demand for American products appeared to help exporters in September. China bought $8.8 billion in goods and services, up 0.3 percent from a month earlier, although those figures were not seasonally adjusted.
Exports to the European Union, where a debt crisis has pushed several countries into recession, were flat. The U.S. government does not seasonally adjust figures for countries and regions as it does for overall imports and exports.
The larger-than-anticipated decline in the trade gap suggested U.S. economic growth may have been faster in the third quarter than the 2.0 percent annual rate initially reported.
JPMorgan said it pointed to a 2.8 percent growth rate. Analysts on Wall Street had increased their estimates for third-quarter growth after stronger-than-expected data on factory orders. The Commerce Department will release a revised GDP growth estimate on Nov. 29.
Many economists still think that cooling growth in the global economy will increasingly weigh on the United States.
Moreover, the 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 of this so-called fiscal cliff appear to have reduced business investment.
Like the gain in exports, the rise in imports provided a positive signal for domestic demand, even though imports subtract from economic growth. Imports of consumer goods rose by $2.7 billion.
Analysts said a good deal of the increase reflected imports of the new iPhone model by Apple. That suggested the increase in imports of consumer goods might be temporary.
Oil imports fell in September as a drop in the quantity of oil imports swamped an increase in the average price for imported oil, which hit $98.88 per barrel.
A separate report showed the number of Americans filing new claims for unemployment benefits fell last week, although Superstorm Sandy roiled the data. “It is pretty difficult to interpret,” said David Sloan, an economist at 4Cast in New York.
Initial claims for state jobless 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 eastern seaboard 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 it from collecting claim reports.
It was unclear if the storm's net effect was to boost or reduce claims, the analyst said. Either way, the impact should prove short-lived, although the analyst said the data could be affected for several more weeks.
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.
New York Gov. Andrew Cuomo said storm damage and economic losses have totaled $33 billion in New York state, and $50 billion in the region.
The four-week moving average for jobless claims, which smoothes out volatility, rose 3,250 to 370,500. Economists think readings below 400,000 generally point to rising employment.