New data ease fears of double dip

WASHINGTON - No, the economy isn't roaring ahead. And no, companies aren't making lots of job offers. But a fresh batch of economic data Thursday at least eased summertime fears that the economy might be on the brink of another recession.

Far fewer people applied for unemployment aid last week, suggesting layoffs are easing. And the nation's trade deficit narrowed in July, thanks to a bigger appetite overseas for American exports.

Analysts say they think the economy will continue to plod along in the coming months. The economy will grow, though too weakly to create many jobs for the nearly 15 million unemployed Americans.

"At the moment, we can rule out a double dip for the economy," Chris Rupkey, chief economist at Bank of Tokyo-Mitsubishi, said Thursday.

The Labor Department reported Thursday that new claims for unemployment aid plunged last week by a seasonally adjusted 27,000 to 451,000. Economists had predicted a much smaller decline of 2,000.

The four-week moving average of new claims, which smooths out weekly fluctuations, also fell last week, dropping by 9,250 to 477,750. So did the number of people continuing to draw unemployment aid. Even with the latest decline, new filings for jobless benefits are still much higher than they would be if the economy were healthy.

The trade deficit narrowed significantly in July as exports climbed to the highest level in nearly two years, reflecting big gains in sales of U.S.-made airplanes and other manufactured goods while imports declined.

The July deficit fell 14 percent to $42.8 billion, the Commerce Department reported Thursday. That was much lower than economists had forecast. The lower trade deficit should give a boost to overall economic growth.

Exports rose 1.8 percent to $153.3 billion, the best showing since August 2008, as sales of jetliners, industrial machinery, computers and telecommunications equipment all posted large gains. Imports, which had been surging, dropped 2.1 percent to $196.1 billion. - AP