After a sharp narrowing in February, the US trade deficit widened again in March. The trade deficit widened from $45.42 billion to $51 83 billion, while the consensus was looking for a somewhat smaller shortage of $50.0B. Looking at the details, imports posted the largest gain on record, rising by 5.2% M/M after a 2.8% M/M drop in February. Exports rose by a more moderate 2.9% M/M, posting the fourth consecutive increase. Excluding petroleum, the trade deficit widened from $17.80B to $23.25, which confirms that the widening in the deficit was not primarily due to petroleum products. The increase in both exports and imports suggests that the US economy is doing better. Nevertheless, for the first quarter GDP data, its is less encouraging news as the wider than expected trade deficit will have a slight negative impact on Q1 GDP, compared with the first estimate.
US jobless claims stayed broadly unchanged in the first week of May. Initial jobless claims dropped from an upwardly revised 368 000 to 367 000, in the week ended the 5th of May, while the consensus was looking for a slight uptick to 368 000. The less-volatile 4-week moving average dropped from 384 250 to 379 000. Although the claims fell only marginally, it is still encouraging and suggests that the uptick in the previous weeks was probably related to distortions due to the Easter holidays. The claims are now again at the lowest levels since the end of March and a further, albeit very gradual decline in the coming weeks is not excluded. Continuing claims, which are reported with an extra week lag, dropped to a new cyclical low, reaching the lowest level since July 2008. In the week ended the 28th of April, continuing claims dropped from an upwardly revised 3 290 000 to 3 229 000.