Trade Deficit at Estimates as Exports Hit Another Record, Job Market Still Healthy

-The Trade Deficit for May came in at -$60.0B versus estimates of -$60.0B and -%58.7B in April.

- Initial Jobless Claims for last week fell to 308K versus estimates of 315K and 320K the prior week.

BOTTOM LINE: The US trade deficit widened in May as a jump in imported oil costs outpaced record exports, Bloomberg reported. Record US exports were boosted by strong civilian aircraft sales and stronger electrical equipment sales. Imports of industrial supplies, which include crude oil, jumped by $2.4 billion to $52.6 billion, reflecting record purchases from OPEC. I continue to believe the trade deficit will improve modestly over the intermediate-term as lower commodity prices more than offset faster US growth coupled with decelerating global growth.

First-time claims for jobless benefits fell more than forecast last week to the lowest in almost two months, adding to evidence that the labor market is holding up going into the second half of the year, Bloomberg reported. The four-week moving-average of claims dropped to 317,750 from 319,250 the prior week. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, held steady at 1.9%. I continue to believe the job market will remain healthy over the intermediate-term without generating substantial unit labor cost increases.