While the US trade deficit did narrow to $25.965 billion in February from $36.204 billion, it was due primarily to the continued contraction in imports, which fell 5.1 percent during the month and signals waning domestic demand. Exports rose 1.6 percent during the same period, thanks to a 11.6 percent increase in consumer goods shipments and a 8.5 percent rise in automotive shipments.
Meanwhile, the US import price index rose 0.5 percent in March, which was the first increase in eight months as petroleum costs jumped 10.5 percent during the survey period. However, most other components of the index remained negative and excluding these volatile petroleum costs, import prices were down 0.7 percent and the overall annualized rate reached a fresh record low of -14.9 percent.
Finally, initial jobless claims fell by 20,000 during the week ending April 4 to 654,000, but remain dangerously close to the record highs of 674,000 reached last week. Likewise, continuing claims jumped by 95,000 during the week ending March 28 to another record high of 5,840,000, suggesting that the ascent of the US unemployment rate is unlikely to abate anytime soon, which is exactly what the Federal Open Market Committee (FOMC) indicated in the release of the March meeting minutes yesterday.
US Initial Jobless Claims (Green), Continuing Claims (White), Unemployment Rate (Blue)
Source: Bloomberg
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