WASHINGTON -- The nation's trade deficit fell sharply in June to an 18-month low, with U.S. exports hanging tough despite the debt problems in Europe and the global economic slowdown, the Commerce Department reported Thursday.
The drop in the trade deficit, to $42.9 billion from $48 billion in May, means economic output was probably stronger in the second quarter than initially reported. The government's early estimate of gross domestic product for the April-to-June period was 1.5% annualized, but the better trade data suggests that the figure will be revised to a rate closer to 2%.
Separately, the Labor Department said new claims for jobless benefits dropped to 361,000 for the week ended Saturday, from a revised 367,000 in the prior week. The claims data -- an indicator of layoff trends -- have been bouncing up and down this summer, in part because of the difficulty of seasonally adjusting for temporary shutdowns in the auto industry.
Analysts nonetheless viewed the latest weekly decline as an encouraging sign, after new jobless filings had jumped to 392,000 in the middle of June. The more reliable four-week moving average showed new jobless claims at 368,250 for the week ended Saturday, up slightly from 366,000 in the prior week.