U.S. Initial Claims rebound from holiday drop, September trade deficit falls on surge in gold exports
After a sharply below trend outcome last week of 192k (revised from 191k) in a week that included the Thanksgiving holiday and may have seen seasonal adjustment problems, initial claims have rebounded above trend to 236k. The 2-week average is 214k, slightly below the 218k seen two weeks ago and the 4-week average of 217k.
Initial claims appear to be in a very marginal downtrend since hitting a very high level of 264k in early September, though that week was another possibly distorted by holiday seasonal adjustments, in that case Labor Day. The survey week for December’s non-farm payroll will come next week.
Continued claims at 1.838m from 1.937m are well below consensus but with continued claims covering the week before initial claims this number may be influenced by Thanksgiving. Still, even excluding this probably distorted number, and upturn in continued claims appears to have peaked.
September’s trade deficit of $52.8bn is the lowest since June 2020 and down from $59.3bn in August. This will support estimates for Q3 GDP though the Q3 deficit is similar to Q2’s and in real terms exports fell by 1.4% in the quarter while imports fell by only 1.0%. Still, the sharp narrowing of the deficit in Q2 after a pre-tariff surge in Q1 has been largely sustained.
Goods exports followed a string of four subdued months with a rise of 4.9% though 70% of this gain came in what looks like a one-time surge in nonmonetary gold which appears to have gone largely to Switzerland. Goods imports saw only a modest rise of 0.6%. Services saw exports down by 0.4% and imports up by 0.3% leaving overall exports up by 3.0% while overall imports rose by 0.6%.
Canada’s trade balance moved into surplus in September at C$0.15bn after a deficit of C$6.43bn in August, conforming positive details in the Q3 current account data and in the net exports contribution to Q3 GDP. On the month exports rose by 6.3% but imports fell by 4.1%. Only 40% of the improvement can be explained by the balance with the US. The US did see a wider deficit with Canada.
