US trade gap narrows and jobless claims fall

The gap between US exports and imported goods has fallen to its lowest level this year while new claims for jobless benefits have dropped, in signs that the economy is picking up.

The US Commerce Department said the seasonally adjusted US trade deficit shrank to $43.1bn (£26.9bn) in September, its narrowest since December 2010, thanks to record-high exports.

The data suggests that the US economy closed the third quarter a little stronger than many expected.

"Slower export growth during the summer was due primarily to weaker exports to Asia and was most pronounced to those going to China. In September, this appeared to be reversing, as exports to Asia (NICS) increased a substantial 10.1 per cent when seasonally adjusted," said Barclays Capital economist Troy Davig.

"This report is reassuring from that standpoint that even if some export demand to the euro area declines, increasing demand for US goods in Asia can support continued export growth.

Imports from China fell 2.5 per cent from a month earlier, although that reading was based on non-seasonally adjusted figures.

New claims for US unemployment benefits also fell last week to their lowest since early April, pointing to a slight improvement in the economy.

The Labor Department said initial claims for state unemployment benefits fell for the second straight week, down 10,000 to a seasonally adjusted 390,000.

The US labour market is still a long way from recovering from the deep 2007-2009 recession, but analysts said the data at least reinforced the view that the healing process was continuing.

"Clearly, the labour market is improving, but at a very slow pace," said Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington.