Trade deficit narrows, economy resists global chill

WASHINGTON, Thu Nov 8, 2012 – The U.S. trade deficit unexpectedly narrowed in September due to a sharp rise in exports, suggesting global demand for U.S. goods was holding up despite the debt crisis in Europe.

Other data on Thursday showed a drop in new claims for jobless benefits last week, although a severe storm distorted the data.

The monthly trade gap fell in September to $41.55 billion, the smallest deficit since December 2010, the Commerce Department said.

The data is the latest positive sign for the economy, which has appeared to perk up as consumers spend more freely and home construction quickens. The trade report also showed an increase in imports of consumer goods.

“This was a very encouraging report as the improvement in both export and non-petroleum import activity suggest improving demand both domestically and globally,” said Millan Mulraine, an economist at TD Securities in New York.

Exports have been a driving force for America’s recovery from the 2007-09 recession and in September they rose by 3.1 percent, the biggest increase in more than a year.

Exports to the European Union, where a debt crisis has pushed several countries into recession, were flat compared to the prior month, although the government does not seasonally adjust figures for countries and regions as it does for overall imports and exports.

Analysts were expecting the trade gap would widen to $45.0 billion, and the decline suggested the U.S. economic growth may have been faster in the third quarter than the 2.0 percent annual rate initially reported.