–Jobless Claims -8k to 355k for Nov 3 Wk, Storm Effects Unclear

By Joseph Plocek

WASHINGTON (MNI) – U.S. September trade data were a surprise that
will add to Q3 GDP calculations, and the 355,000 initial jobless claims
reading for the November 3 week left our opinion unchanged that there is
a gradually healing labor market despite storm effects.

Initial Unemployment Claims fell 8,000 to 355,000 in the November 3
week, as severe seasonal adjustment held the total down. A Labor
Department analyst said there were some claims from hurricane Sandy but
it might take several more weeks for the storm to “work through” the
data.

The analyst said one state indicated claims were lessened by the
storm but more are coming (power outages closed intake offices), but
several states said activity already is elevated. Only Oregon’s claims
were estimated and this was not a hurricane effect. The overall effect
of the storm so far was “a mixed bag” he said.

Unemployment claims averaged 370,000 in October after 376,000 in
September, little changed. The latest number is a slight downtick, but
not by enough to alter the outlook, especially given the possibility
that claims still could jump in the aftermath of the storm.

Continuing unemployment claims were 3.127 million in the October 27
week, with their downtrend in tact.

In a separate report, the U.S. September trade balance surprised at
-$41.5 billion (the expectation was -$45 billion), as imports gained
$3.4 billion but exports surged $5.6 billion. Both sides of the
trade report reflect in part the higher pricing for oil during the
month. September oil exports posted new highs.

In imports, crude oil and related items were up $1.3 billion on a
$4.52 price jump for imported crude to $98.88 on average. Imports of
cell phones and related products surged $1.546 billion as the iPhone-5
came on line. As an important offset, services imports fell $0.6 billion
as royalty imports printed -$0.8 billion on a cessation of payments for
the Olympics broadcast rights.

The $5.6 billion exports gain was led by +$2.2 billion in oil and
related, also a pricing effect. But soybeans continued to rebound at
+$871 million and civilian aircraft was up $369 million.

Unadjusted, the trade gaps by country included: China at -$29.1
billion after -$28.7 billion in August, Japan -$4.8 billion after -$6.7
billion, and OPEC -$7.1 billion after -$8.1 billion.

Also, the unadjusted trade balance with South/Central America
printed +$2.2 billion, its highest on record, after +$373 million in
August. Exports to South America were a record $16.2 billion in total ,
apparently heavily concentrated in oil. Exports to Colombia, where the
U.S. typically runs a large gap, surged to $1.7 billion, a new high.

Overall, the trade data were better than expected and the August
gap was revised lower to -$43.8 billion, though possibly a temporary
effect of oil pricing and flows. The Commerce Department had estimated
-$45 billion for September trade in the GDP data, so this report will
add perhaps another 0.2 point to Q3 GDP.

**MNI Washington Bureau: (202)371-2121**

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