U.S. trade deficit grows; jobless claims, exports fall
6/11/2010WASHINGTON - The picture of a steady but still sluggish recovery emerged from reports Thursday that showed fewer people are claiming unemployment aid while U.S. exports are slowing.
The reports echo Federal Reserve Chairman Ben Bernanke's suggestion this week that the rebound will remain intact, but it will take time to create enough jobs to bring down the 9.7 percent unemployment rate.
Initial unemployment claims fell by 3,000 to a seasonally adjusted 456,000, the Labor Department said. That's the third straight drop. However, claims haven't moved below where they stood in January.
At the same time, the tally of laid-off workers continuing to claim jobless benefits fell by 255,000 to 4.5 million. That's the largest decline in almost a year. It could be because more people are finding work. But it may simply mean they have exhausted their initial state benefits.
A weakening in U.S. sales overseas could hurt the job market. The Commerce Department said the U.S. trade deficit rose to the highest level in 16 months as exports fell for the second time in three months. Exports have been a source of strength for U.S. manufacturers.
The trade deficit in the United States grew 0.6 percent to $40.3 billion, the most since December, 2008, the department said.
The fallout from the European debt crisis may keep limiting trade flows in coming months as the subsequent plunge in oil prices restrains imports.
The trade gap was projected to widen to $41 billion, according to the median forecast in a Bloomberg News survey of 75 economists. Estimates ranged from deficits of $37.5 billion to $44 billion. The Commerce Department revised the March deficit to $40 billion from a previously estimated $40.4 billion.
Exports decreased 0.7 percent to $148.8 billion, reflecting declines in shipments of pharmaceuticals, soybeans, and generators. Even with the drop, the level of exports was the second-highest since October, 2008, pointing to a rebound in global economic growth.