US trade deficit surges on imports
Source: Agencies |
March 11, 2011, Friday
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Print Edition
Print Edition
STRONG imports pushed up the United States trade deficit in January, a further sign of rising demand, while new claims for jobless aid rose more than expected last week but remained at levels suggesting a labor market recovery was intact.
The US Labor Department said initial claims for state unemployment benefits increased by 26,000 to a seasonally adjusted 397,000. Economists looked for claims to rise to 378,000.
The trade deficit widened to US$46.3 billion from US$40.3 billion, the US Commerce Department said yesterday. That was higher than forecasts for a US$41.5 billion gap.
The wider trade gap reflected a surge in oil, capital goods and car imports, which overpowered a record rise in exports. While the strong import growth is a sign of improved domestic demand, it suggested US production in the first quarter could be a bit softer than economists had expected.
"This is a pretty bullish number," said Eric Green, chief economist at TD Securities in New York.
"I would look at this as more of a reflection of strength than weakness, and when you look at this in terms of how the numbers play out in first-quarter GDP, there is less of an effect than one might think."
The closely watched trade gap with China also widened in January.
Separately, China said its trade surplus with the US shrank to US$8 billion in February, compared with US$13.6 billion in January.
The jobless claims data, coming on the heels of news last week that employers added 192,000 jobs in February - the most in nine months, are unlikely to change perceptions of an acceleration in the pace of job creation and the broader economic recovery.
The four-week moving average of unemployment claims - a better measure of underlying trends - rose 3,000 to 392,250 last week. Claims held beneath the 400,000 threshold for a third straight week, and it was the second consecutive week for the four-week average.
That level is generally regarded as signaling steady jobs growth.
"Jobless claims are beginning to trend lower, and that's what really is important here. For a long time we were asking if the economy was doing better, why aren't companies hiring, and now that component seems to be falling into place," said Michael Materasso, portfolio manager at Franklin Templeton.
Though the correlation between weekly claims and nonfarm payrolls has weakened somewhat, economists believe the stage has been set for payrolls gains in excess of 150,000 a month.
A Labor Department official said that there was nothing unusual in the state-level data, but noted that actual reported claims tended to rise in the week after a federal holiday.
The US Labor Department said initial claims for state unemployment benefits increased by 26,000 to a seasonally adjusted 397,000. Economists looked for claims to rise to 378,000.
The trade deficit widened to US$46.3 billion from US$40.3 billion, the US Commerce Department said yesterday. That was higher than forecasts for a US$41.5 billion gap.
The wider trade gap reflected a surge in oil, capital goods and car imports, which overpowered a record rise in exports. While the strong import growth is a sign of improved domestic demand, it suggested US production in the first quarter could be a bit softer than economists had expected.
"This is a pretty bullish number," said Eric Green, chief economist at TD Securities in New York.
"I would look at this as more of a reflection of strength than weakness, and when you look at this in terms of how the numbers play out in first-quarter GDP, there is less of an effect than one might think."
The closely watched trade gap with China also widened in January.
Separately, China said its trade surplus with the US shrank to US$8 billion in February, compared with US$13.6 billion in January.
The jobless claims data, coming on the heels of news last week that employers added 192,000 jobs in February - the most in nine months, are unlikely to change perceptions of an acceleration in the pace of job creation and the broader economic recovery.
The four-week moving average of unemployment claims - a better measure of underlying trends - rose 3,000 to 392,250 last week. Claims held beneath the 400,000 threshold for a third straight week, and it was the second consecutive week for the four-week average.
That level is generally regarded as signaling steady jobs growth.
"Jobless claims are beginning to trend lower, and that's what really is important here. For a long time we were asking if the economy was doing better, why aren't companies hiring, and now that component seems to be falling into place," said Michael Materasso, portfolio manager at Franklin Templeton.
Though the correlation between weekly claims and nonfarm payrolls has weakened somewhat, economists believe the stage has been set for payrolls gains in excess of 150,000 a month.
A Labor Department official said that there was nothing unusual in the state-level data, but noted that actual reported claims tended to rise in the week after a federal holiday.
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