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U.S. Trade Deficit Widened 16% in July
The trade deficit expanded sharply in July as US demand for foreign goods jumped 4.7% ― much more than analysts were anticipating. Exports grew too; the 2.2% monthly gain marks the third straight advance, suggesting stabilization abroad.rnrn“While a wider trade gap means a larger net export subtraction from GDP growth, we interpret this as evidence of a rebound in overall economic activity—both in the US and abroad,†said Joseph LaVorgna, chief US economist at Deutsche Bank.
Initial Jobless Claims Moderate, Continuing Claims Fall
Analysts have been calling for weekly jobless claims to fall to 550,000 for the past six weeks, and in the period ending September 5, it finally happened. Until the four-week average follows suit, however, it’s not clear there is much meaning in the apparent moderation, especially as 550k still suggests rapid job cutting.rnrnThe 550k figure indicates that 26,000 fewer Americans filed for initial unemployment benefits than the previous week. That’s certainly in the direction the economy needs right now, but it’s hard to be optimistic about stabilization when the 4-week average is 570k, whereas in a stable job market the
Trade Balance and Jobless Claims Before the Bell
US stock markets are looking for a flat open after the S&P 500 moved up 0.78% yesterday, but prices could change quickly depending on the outcome of two data releases an hour before the bell. The news is set to be mixed: the monthly trade deficit is expected to expand to $28 billion in July as imports rise faster than exports, but the weekly labor data should show 20k fewer people filing for first-time jobless claims.rnrnGlobally, equities have been turning in both directions. Asia saw the Nikkei soar 1.95% and the Hang Seng climb 1.05%, but China’s Shanghai Index moderated
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