U.S. February trade shows gains in both exports and imports, Initial Claims very low
The latest US data suggests a resilient economy ahead of the oil shock, with a narrower than expected February trade deficit of $57.3bn, and while up from $54.7bn in January shows strong rises in both experts and imports, by 4.2% and 4.3% respectively. Weekly initial claims at 202k from 211k are surprisingly low, suggesting no immediate damage to the labor market from the oil shock.
Initial claims are the lowest since January 10 with no obvious special factors. The March non-farm payroll was supported two weeks ago so forecasts should not be revised but the data suggests layoffs remain very low, and maty even be falling further. The 4-week average is the lowest since January 17, which was the survey week fir a strong January payroll, that was corrected by slippage in February
Continued claims corrected higher by 25k to 1.841m after a 35k decline. The 4-week average, which had stabilized after dipping into January, is slipping again. Hirings may also be low, but the numbers of unemployed finding jobs may be picking up again.
Trade data remains volatile though the average of the first two months of Q1 at $56.0bn is not far off a Q4 average of $53.3bn. The deficit remains below the 2024 trend of around $75.0bn per month despite now being 11 months away from the record deficit of $135.9bn in March 2025 when imports surged in anticipation of tariffs.
Goods exports rose by 5.9% in nominal and 4.6% in real terms, a second straight strong gain to follow two straight declines, while goods imports rise by 5.0% in nominal and 3.2% in real terms, more than fully erasing a January decline. Services saw exports up by 1.0% and imports up by 1.6% in nominal terms.
The goods exports gain however was narrowly based, with 69.6% of it, or $8.0bn, coming in nonmonetary gold, a sector that has been particularly volatile recently and now looks unsustainably high. Computers however saw a significant correction lower from recent strength. Nonmonetary gold and computers together explained 41.6% of the exports increase.
In the imports breakdown computers were by far the strongest riser, extending recent strength and explaining 38.4% of the imports increase. Adding computer accessories and semiconductors explains 57.1% of the imports increase. For exports semiconductors were a positive, partially offsetting the negative from computers while computer accessories were a modest negative.