By Kevin Kastner

WASHINGTON, December 10 (MNI) – The international trade gap
narrowed in December, as exports surged and imports declined. The
October deficit was smaller than most analysts had expected and could
result in adjustments to GDP estimated for the fourth quarter.

The Michigan sentiment index rose sharply in early-December, with
gains in both the current conditions and expectations measures. The data
suggest that consumers were a bit more optimistic, which could translate
into better holiday sales.

The U.S. Treasury posted a larger than expected budget gap in
November. The deficit was much wider than the gap in November 2009,
though there was a calendar quirk that affected outlays in November
2009. The gap for the two months so far in the 2011 fiscal year was only
slightly narrower than the gap in the October-November period a year
earlier.

The level of initial jobless claims fell back in the December 4
week, keeping claims on their recent downward trend. The surge in
unadjusted claims in the post-holiday week was smaller than seasonal
adjustment factors had expected. The week after Thanksgiving is usually
the largest one-week gain of the year due to the usual post-holiday
rebound and also to layoffs in seasonal industries such as construction.
The pattern should also be seen in the first few weeks of January when
holiday workers are laid off.

Consumer credit use rose again in October on a further spike in
nonrevolving credit. At the same time, revolving credit use fell for the
26th straight month.

—
Treasury Statement for November ($ billions)
Friday, December 10 at 2:00 p.m. ET Actual:
Median Range Responses Nov10 Oct10 Nov09
Balance -$130.0b -$145.0b to -$110.0b 10 -$150.4b -$140.4b -$120.3b

Comments: The U.S. Treasury posted a $150.4 billion budget gap in
November, well above the $120.3 billion gap in November 2009, but the
2009 figure was affected by a shift in outlays into the previous month.
Through the first two months of the fiscal year, the shortfall stands at
$290.8 billion, only slightly smaller than the $296.7 billion gap in the
same period a year earlier.

—
Reuters/University of Michigan Survey for December (preliminary)
Friday, December 10 at 9:55 a.m. ET Actual:
Median Range Responses Dec10p Nov10 Oct10
Consumer Sent 72.2 71.0 to 76.5 17 74.2 71.6 67.7

Comments: The Michigan Sentiment index jumped to a reading of 74.2
in early-December from 71.6 in November, with the current conditions
index and expectations reading both higher and inflation expectations
down.

—
Trade in Goods and Services for October (deficit, billion $)
Friday, December 10 at 8:30 a.m. ET Actual:
Median Range Responses Oct10 Sep10 Aug10
Trade Gap -$44.0b -$45.5b to -$40.0b 19 -$38.7b -$44.6b -$46.9b

Comments: The international trade gap narrowed more than expected
to $38.7 billion in October on a surge in exports and lower imports. The
export gain was led by industrial supplies, particularly energy
components. There were also stronger exports of capital goods, food,
automotive, and consumer goods, though civilian aircraft exports
declined. Imports fell due to a decline in the value of energy goods,
as well as lower capital goods, food, and automotive imports. Consumer
goods imports, however, surged prior to the holiday season. The trade
gap with China was smaller, but there were wider deficits with Canada,
the EU, and Japan. The trade data should result in stronger 4Q GDP
estimates.

—
Weekly Jobless Claims for week of December 4
Thursday, December 9 at 8:30 a.m. ET Actual:
Median Range Responses 04-Dec 27-Nov 20-Nov
Jobless claims 425k 370k to 435k 17 421k 438k 410k

Comments: Initial jobless claims fell 17,000 to 421,000 in December
4 week, slightly below the 425,000 level expected. The Labor Department
analyst said seasonal factors expected a 46.9% rise, or about 194,000,
in unadjusted claims in what is usually the largest weekly jump of the
year due to holiday effects and seasonal layoffs in construction and
other industries. Actually, unadjusted claims rose only 40.9%, or
169,085, to 582,007. With the decrease in seasonally adjusted claims,
the 4-week moving average fell 4,000 to 427,500, continuing its downward
trend. Continuing claims fell 191,000 to 4.086 million in November 27
holiday week, the lowest level since the November 15, 2008 week. The
insured unemployment rate fell to 3.2%, the lowest since the November
22, 2008 week.

—
Consumer Credit for October (dollar change, billions)
Tuesday, December 7 at 3:00 p.m. ET Actual:
Median Range Responses Oct10 Sep10 Aug10
Cons Credit -$2.0b -$5.0b to +$1.5b 15 +$3.4b +$1.2b -$5.0b

Comments: Consumer credit usage rose $3.4 billion in October,
though revolving credit use continued its downward trend with a $5.6
billion decline. Nonrevolving credit use jumped $9.0 billion in the
month on strong auto sales. Nonrevolving credit usage has risen over $19
million in the last three months combined.

—
Factory Orders for October (percent change)
Friday, December 3 at 10:00 a.m. ET Actual:
Median Range Responses Oct10 Sep10 Aug10
New Orders -1.0% -1.5% to -0.3% 9 -0.9% +3.0% Flat

Comments: October factory new orders fell 0.9%, slightly above the
1.0% drop expected. Nondurables orders rose 1.5%, led by petroleum and
coal products, while durables orders were revised up to a 3.4% decline
from the previously reported 3.3% decline. Total factory orders
excluding transportation fell 0.2%. Factory shipments were up 0.3%, with
nondefense capital goods shipments down 0.4% and down 1.3% excluding
aircraft. Factory inventories were up 0.9%, while unfilled orders were
up 0.6%. The inventory-to-shipment ratio rose to 1.28 in October from
1.27 in September.

—
ISM Non-manufacturing Index for November
Friday, December 3 at 10:00 a.m. ET Actual:
Median Range Responses Nov10 Oct10 Sep10
ISM NMI 55.0 54.0 to 58.0 10 55.0 54.3 53.2

Comments: The ISM non-manufacturing index rose to a reading of 55.0
in November, as expected, with most of the components up. However, the
business activity index declined, and the reading for prices paid
lower. Still, all of the data categories were above the break even point
of 50.0 this month.

—
Nonfarm Payrolls for November (change in thousands)
Friday, December 3 at 8:30 a.m. ET Actual:
Median Range Responses Nov10 Oct10 Sep10
Payrolls +150k +100k to +200k 11 +39k +172k -24k
Private Jobs +160k +115k to +188k 6 +50k +160k +112k
Jobless Rate 9.6% 9.5% to 9.7% 11 9.8% 9.6% 9.6%
Hrly Earnings +0.2% +0.1% to +0.2% 11 Flat +0.3% +0.1%
Avg Wkly Hrs 34.3 34.3 to 34.3 10 34.3 34.3 34.2

Comments: Nonfarm payrolls rose only 39,000 in November, well below
expectations, on declines in the goods-producing, retail, government,
and financial activities sectors. Private payrolls were up 50,000. The
unemployment rate, which had been 9.6% for three months, jumped to 9.8%
on a sharp decline in household employment and a larger jump in
household unemployment, suggesting that a large number of workers
entered the labor force to look for work before the holidays–and did
not find it. Hourly earnings were flat in November after a 0.3% October
increase, while the average workweek held steady at 34.3 hours.

** Market News International Washington Bureau (202) 371-2121 **

[TOPICS: MAUDS$]