US trade gap widens to $41.8bn


The US trade deficit widened more than expected in September as imports rose to their highest level in almost a year, which could probably see third-quarter growth estimates trimmed.
Other data on Thursday suggested the labor market continued to gradually improve in November. New applications for jobless benefits fell a bit last week, but the decline in claims for the week ended Nov. 2 was less than previously reported.
The trade gap increased 8.0 percent to $41.8 billion, the largest since May, the Commerce Department said. Economists polled by Reuters had expected the shortfall on the trade balance to widen a bit to $39.0 billion in September. When adjusted for inflation, the trade gap widened to $50.4 billion, also the largest since May, from $47.4 billion the prior month.
Trade contributed 0.31 percentage point to the economy’s 2.8 percent annualized growth pace in the July-September quarter.
The three-month moving average of the trade deficit, which irons out month-to-to month volatility, increased to $39.7 billion in the three months to September from $37.3 billion in the prior period.
In a separate report, the Labor Department said initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 339,000. Claims for the prior week were revised to show 5,000 more applications received than previously reported.
Economists polled by Reuters had expected first-time applications to fall to 330,000 last week. The four-week moving average for new claims, which irons out week-to-week volatility, dropped 5,750 to 344,000.

Lackluster domestic demand is preventing the labor market from generating stronger jobs growth that would decisively lower the unemployment rate. Employers added 204,000 new jobs to payrolls last month, but a 16-day government shutdown temporarily pushed the jobless rate up by a tenth of a percentage point to 7.3 percent, the Labor Department reported last week.
While trade has supported the economy’s recovery, slowing global demand is eroding export growth. Exports of goods and services slipped 0.2 percent to $188.9 billion in September. That was the third straight month of declines. In September, exports to the 27-nation European Union increased 5.6 percent.
Exports to the EU in the first nine months of the year were down 2.7 percent compared to the same period in 2012. Exports to China rose 3.4 percent. Exports to that country were up 5.0 percent for the first nine months of 2013.
Imports rose 1.2 percent to $230.7 billion, the highest level since November last year.



Please enter your comment!
Please enter your name here