- The Import Price Index for September rose 2.3% versus estimates of a 1.0% increase and a 1.2% rise in August.
- Initial Jobless Claims for last week fell to 389K versus estimates of 360K and 391K the prior week.
- Continuing Claims for last week fell to 2873K versus estimates of 2939K and 2878K prior.
BOTTOM LINE: The US trade deficit widened to $59 billion in August as record crude oil prices caused imports to rise, Bloomberg reported. Both imports and exports were reached all-time highs during the month. Excluding petroleum, the US trade deficit narrowed to $38.4 billion, the smallest since March. US demand for foreign goods is a reflection of an economy that is growing faster than most of its biggest trading partners. The US economy is projected to grow 3.5% this year, almost 3 times faster than the 1.3 percent gain estimated for Europe. Japan’s economy is expected to growth 2%. The US dollar is breaking out today as overseas investors anticipate improving US deficits as energy prices decline.
Prices of goods imported into the US posted their biggest gain since 1990 in September, led by rising oil and natural gas prices after two hurricanes struck the US Gulf Coast, Bloomberg said. I expect Import Price increases to decelerate and eventually begin falling over the intermediate-term.
The number of Americans making first-time claims for jobless benefits fell less than expected last week as unemployment offices received a new wave of filings from workers displaced by the Gulf Coast hurricanes, Bloomberg reported. The four-week moving-average of claims fell to 395,750 from 404,500 the prior week. The insured employment rate, which tracks the US unemployment rate, fell to 2.2% from 2.3%. Initial jobless claims will likely continue trending lower through year-end as workers displaced by the hurricanes find work and rebuilding begins.