In August, the US trade deficit stayed broadly unchanged from the previous month, in line with expectations. The July outcome was however revised from a deficit of $44.8 billion to $45.6B. Also the details show little momentum as imports stabilized, while exports dropped marginally (by 0.1% M/M). Excluding petroleum, the trade deficit narrowed slightly, from $19.885 billion to $19.546. The debt ceiling debate and rating downgrade probably resulted in slowing international trade. Despite the stabilization in imports, imports from Japan increased significantly, which might be a signal that the disruptions from the earthquake are easing. The report shows also that the trade gap with China widened to a record high as also from China rose sharply. After the significant narrowing in the deficit in July, the outcome is still encouraging from Q3 GDP growth as net exports will make a positive contributon.
In the week ended the 8th of October, US initial jobless claims continued to hover around the important 400 000 level. Initial claims fell from an upwardly revised 405 000 to 404 000, in line with the consensus estimate, which was looking for an increase to 405 000. As a result, the 4-week moving average edged further down too, falling from 415 000 to 408 000, the lowest level since Mid-August. The Labour Department added that there were no special factors in the report. Continuing claims, which are reported with an extra week lag, surprised on the downside of expectations. In the week ended the first of October, continuing claims dropped by 55 000 to a total level of 3 670 000. The claims continue to hover around the 400 000 level, which is not too bad especially as the economic climate remains weak and uncertainty is very high. Nevertheless, the claims are hovering sideways from the start of the year, with no trend, indicating that the labour market is relatively stagnant.