Trade gap, job claims show signs of economic recovery

WASHINGTON - U.S. economic growth showed more tentative signs of improvement yesterday as jobless benefit claims hit a four-month low last week and the international trade gap narrowed in September.

Separately, the Treasury Department reported that the federal government began the new budget year with a deficit that fell 20 percent from a year ago but was still the third highest October imbalance on record.

The reports followed last Friday's U.S. payrolls data showing private-sector job growth was the best for any month since April, suggesting the economy may be beginning to pull out of its summer doldrums.

"Two months ago, three months ago there was a real growth scare and people were talking about a double dip [recession]," said Jim O'Sullivan, chief economist at MF Global in Manhattan. "Now, the numbers are not only not showing double-dip, but they're showing reacceleration."

The number of workers filing new claims for state unemployment aid fell to 435,000 in the week ended Nov. 6 from a revised 459,000 in the prior week, the Labor Department said. Economists had looked for claims to come in at 450,000.

The bigger-than-expected drop took a four-week moving average of claims, a better indicator of underlying trends, to its lowest level since just before Lehman Brothers filed for bankruptcy in September 2008.

At the same time, the number of people still receiving regular state benefits after an initial week of aid fell to 4.3 million in the week ended Oct. 30, the lowest level since November 2008.

In a separate report, the Commerce Department said the U.S. trade deficit narrowed more than expected in September to $44 billion, despite near record imports from China.

A narrower trade deficit is positive for U.S. economic growth since it suggests more demand for U.S. production.

Economists said the international trade report suggested the U.S. economy grew a bit more swiftly in the third quarter than the 2 percent annual pace reported late last month. Many also said the trade deficitcould be a positive in the final three months of the year.

U.S. exports rose slightly in September, a third consecutive monthly gain. Imports fell 1.0 percent.

Meanwhile, the Treasury Department said last month's budget deficit totaled $140.4 billion, down by $35.9 billion from the record holder for the month, an imbalance of $176.4 billion in October 2009.