A container ship is unloaded in Los Angeles Harbor. (Don Bartletti / Los Angeles…)
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.
The June trade numbers surprised analysts; most were expecting little change in the deficit. But U.S. imports fell by $3.5 billion from May, to $227.9 billion. The drop was widespread and reflected the weaker growth and demand in the U.S. Americans bought less crude oil as well as foreign-made capital goods and consumer products.
U.S. exports, by contrast, grew by $1.7 billion from the prior month, to $185 billion. That's a slower pace of increase compared with earlier this year, but was still welcomed by economists, some of whom were expecting weakening exports with the recession in the Eurozone and a slowdown in China and other emerging economies. Apart from food and beverages, U.S. exports in June grew for all major categories, including consumer goods, cars and industrial supplies.
"The easing in global demand and the strengthening in the dollar have yet to take a major toll on the U.S.," said Paul Dales, an economist at Capital Economics.
"But we doubt this can last," he added in a note to clients Thursday. "Survey measures of export orders have already fallen sharply, and it probably won't be long before the actual export growth slows."
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