Boost to returns on investment leads to narrower US trade gap

Ben Southwood
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A BOOST to returns on US investments abroad helped drive the trade deficit narrower in the fourth quarter of 2012, figures revealed yesterday.

The US trade deficit inched down from $112.4bn (£74.4bn) in the third quarter to $110.4bn in the fourth quarter, the Bureau of Economic Analysis (BEA) said.

This move was driven by an $8.1bn jump in income receipts – mainly on US assets owned abroad – helped by a $1.9bn gain in services exports, the BEA numbers showed. But these moves had to work against a $4.8bn jump in total imports, as well as a $1bn fall in goods exports.

Meanwhile, new unemployment insurance claims fell from 342,000 in the week ending 2 March to 332,000 in the week ending 9 March, according to separate research from the Department of Labor.

The four-week average, which smooths out weekly jitters, fell 2,750 to 346,750, the lowest since the beginning of March 2008.

Total insured unemployment, published a week in arrears, was 3.02m in the week ending 2 March, down from 3.09m from the previous week, and around 370,000 below the same week a year before.