The US trade balance showed a sharp narrowing in the deficit in September, while the consensus was looking for a slight widening. The trade deficit shrank from a revised $43.8 billion (earlier reported as a deficit of $44.2B) to $41.5 billion, the lowest deficit since December 2010. The breakdown is encouraging too as exports rebounded by 3.1% M/M in September, while imports increased more moderately, by 1.5% M/M, posting the first increase in six months. Exports were boosted by exports of soybeans (32% M/M), which however suppressed exports in the previous month, while also exports of petroleum jumped by almost 24% M/M in September. Excluding petroleum, the trade deficit narrowed from $20.305B to $19.875B and also the real trade deficit narrowed during the month. The significant narrowing in the deficit, together with the increase in both exports and imports is an encouraging sign, adding to the recent positive indications from the US economy. Nevertheless, the US will probably continue to suffer from poor demand from Europe, where the economy is expected to stagnate next year. The September trade figures will probably lead to an upward revision in the Q3 GDP data.
In the week ending the 3th of November, US initial jobless claims dropped for a third consecutive month. Initial claims fell by 8 000, from 636 000 to 355 000, while the consensus was looking for a marginal pick-up to 365 000. The less volatile four-week moving average picked up from 367 250 to 370 500. The Labour Department added that the claims were distorted due to the Tropical Storm Sandy, which pushed up claims in some states, while a lack of electricity suppressed claims in other states. It may take 3 to 4 weeks for all Sandy related claims to come in. For now, it is impossible to draw conclusions from these claims figures. Continuing claims, which are reported with an extra week lag dropped sharply too, by 135 000 to 3 127 000, reaching their lowest level since July 2008. Imports of petroleum were up by 1.0% M/M