US trade deficit nar­rows, econ­omy re­sists global chill

Job­less claims fall 8,000 in lat­est week

The Pak Banker - - Front Page -


The US trade deficit nar­rowed in Septem­ber as ex­ports in­creased, sug­gest­ing global de­mand for US goods was hold­ing up de­spite the debt cri­sis in Europe.

Other data on Fri­day showed a drop in new claims for job­less ben­e­fits last week, al­though a se­vere storm dis­torted the data. The sea­son­ally ad­justed monthly trade gap fell to $41.55 bil­lion (Dh152.4 bil­lion), the small­est deficit since De­cem­ber 2010, the Com­merce Depart­ment said. An­a­lysts were ex­pect­ing the trade gap would widen to $45.0 bil­lion, and the de­cline sug­gested the US eco­nomic growth may have been faster in the third quar­ter than the 2.0 per cent an­nual rate ini­tially re­ported. The data is the lat­est pos­i­tive sign for the econ­omy, which has ap­peared to perk up as con­sumers spend more freely and home con­struc­tion quick­ens. Still, busi­ness in­vest­ment sank in the third quar­ter, a sign com­pa­nies lack con­fi­dence in the strength of the eco­nomic re­cov­ery. Also, a pack­age of tax hikes and spend­ing cuts planned for the new year could eas­ily send the econ­omy into re­ces­sion.

In Septem­ber, US ex­ports rose 3.1 per cent, the big­gest in­crease in more than a year. Ex­ports to the Euro­pean Union, where a debt cri­sis has pushed sev­eral coun­tries into re­ces­sion, were flat com­pared to the prior month, al­though the fig­ures were not ad­justed for sea­sonal swings.

US im­ports rose 1.5 per cent in Septem­ber when sea­son­ally ad­justed. That also pro­vided a pos­i­tive sign for the eco­nomic out­look, as im­ports of con­sumer goods rose by $2.7 bil­lion while im­ports of pe­tro­leum prod­ucts fell.

The av­er­age price for im­ported oil rose in Septem­ber to $98.88 per bar­rel, but the quan­tity of oil im­ports dropped. US stock in­dex fu­tures rose fol­low­ing the data’s pub­li­ca­tion, while prices for US Trea­suries trimmed mod­est gains.

A sep­a­rate re­port showed the num­ber of Amer­i­cans fil­ing new claims for un­em­ploy­ment ben­e­fits fell last week, sug­gest­ing the labour mar­ket’s slow re­cov­ery was gain­ing trac­tion al­though Su­per­storm Sandy roiled the data.

Ini­tial claims for state un­em­ploy­ment ben­e­fits dropped 8,000 to a sea­son­ally ad­justed 355,000, the Labour Depart­ment said. That was be­low the me­dian fore­cast in a Reuters poll of 370,000.

An an­a­lyst from the depart­ment said Sandy, a mam­moth storm that slammed into the East Coast on Oc­to­ber 29, boosted claims in some states by leav­ing peo­ple out of work, but also re­duced claims in at least one state be­cause power out­ages kept the state from col­lect­ing claim re­ports.

The im­pact of the storm is likely to be tem­po­rary. It was un­clear if the storm’s net ef­fect was to boost or re­duce claims, the an­a­lyst said. He said the storm could continue to af­fect the claims re­port for sev­eral more weeks. “It is pretty dif­fi­cult to in­ter­pret,” said David Sloan, an econ­o­mist at 4Cast in New York. The storm killed at least 121 peo­ple in the United States and Canada and left more than 8 mil­lion homes and busi­nesses with­out elec­tric­ity in the North­east.

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