US trade deficit near two-year low

The US trade deficit unexpectedly shrank in September to the lowest level in almost two years as exports climbed to a record high, while the number of Americans claiming unemployment insurance fell last week, pointing to improvement in the country's labour market.

The US trade gap shrank to USD41.5bn in September, the smallest since December 2010, from USD43.8bn in August, commerce department data showed. Analysts had forecast a shortfall of USD45.4bn.
The positive data reflects a 3.1 percent increase in exports to an all-time high of USD187bn, following a 1 percent decline in August. Sales to foreign buyers were broad-based, with products from soybeans to fuel and commercial aircraft all posting gains.
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Imports increased 1.5 percent after slipping 0.2 percent the month before, on the back of a jump in shipments of consumer goods from cell phones to clothing and toys.
A wider trade deficit acts as a drag on growth, meaning that the US earns less on overseas sales of US-made goods while spending more on foreign products.
Meanwhile, initial claims for jobless benefits declined by 8,000 to a seasonally adjusted level of 355,000 in the week ending November 3, labour department data showed. The data came in below the prior week's level of 363,000. Economists surveyed by Bloomberg had expected a level of 370,000.
But analysts said the data were distorted due to the impact of Hurricane Sandy. They expect a big jump next week as more storm-related applications begin to be processed.
Claims often dip in the week a major storm hits as those affected do not tend to file for unemployment insurance immediately, hampered by damage to their homes, power and water outages or transportation problems. A government spokesperson said it might take three to four weeks for the impact of the storm to be seen in the weekly claims data.
The four-week average of new claims, which smooths out the volatility of the weekly data and is seen as a more accurate barometer of labour market trends, rose to 370,500, an increase of 3,250 from the previous week's 367,250.
Economists say readings below 400,000 point to an increase in employment, with hiring outpacing lay-offs.
Continuing claims for jobless benefits fell 135,000 to 3.13m in the week ended October 27, the fewest in four years. The number of people collecting emergency and extended payments increased by about 20,000 to 2.15m in the week ended October 20.