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Jobs Show Mixed Picture; U.S. Trade Deficit Narrows

The number of U.S. workers filing new claims for jobless benefits fell by 9,000 last week, the government said on Thursday, though a more reliable gauge of labor trends rose to its highest in more than two years.

Unemployment Line
AP
Unemployment Line

Initial claims for state unemployment insurance aid fell for the second straight week, slipping to 348,000 in the week ended Feb. 9, down from a slightly upwardly revised 357,000 for the prior week, the Labor Department said.

The rise in the number of new claims was slightly more than the 347,000 Wall Street forecast.

The four-week moving average of new claims, considered a more accurate barometer of employment trends because it irons out weekly volatility, rose to its highest since Oct. 22, 2005, which was in the aftermath of Hurricane Katrina.

Meanwhile, the U.S. trade deficit narrowed more than expected in December despite record prices for imported oil, while another month of record exports helped shrink the annual trade deficit for the first time in six years, a government report showed.

The December trade gap narrowed 6.9 percent from November to $58.8 billion, the biggest month-to-month drop in over a year. Wall Street analysts surveyed before the report had pegged the December deficit at $61.5 billion.

The smaller-than-expected trade gap will likely prompt economists to raise their estimates of fourth quarter U.S. economic growth.

The trade deficit totaled $711.6 billion for all of 2007, down 6.2 percent from the record set in 2006 and the largest annual percentage drop since 1991.

Good world economic growth and a weakening dollar have propelled U.S. exports to new heights, while imports also continue to set records. Economists estimate that net exports contributed about one-half percentage point to U.S. economic growth in 2007.

U.S. exports of goods and services set a record in December, pushing the total for the year to a record $1.62 trillion. Major categories of capital goods, industrial supplies and materials, consumer goods, autos and auto parts, and food, feed beverages all set records in 2007. The 12.2 percent rise in exports followed a 12.7 percent gain in 2006.

Imports set a record for the year at $2.33 trillion, with individual records set in the major categories. The United States also imported a record $331.2 billion worth of oil in 2007 as prices for imported oil averaged a record $64.27 per barrel.

December oil imports also set a monthly record, as did the average price for imported oil which rose to $82.76 per barrel, from $79.65 in November. Prices were up 53.7 percent from a year ago.

Without high oil prices, the annual U.S. trade deficit likely would have shrank further. The petroleum deficit accounted for more than 40 percent of the total deficit in 2007 and hit a record $293.5 billion.

Despite the drop in the overall deficit, the bilateral trade gap with China grew 10.2 percent to a record $256.3 billion in 2007. Imports from China during the year rose 11.7 percent to a record $321.5 billion, overwhelming an 18.2 percent rise in U.S. exports to China to a record $65.2 billion.

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