The U.S. trade deficit improved slightly to $5.77 billion in January even though American export sales fell for the third straight month, the government said Thursday.
The Commerce Department said that January's deficit was the smallest in two months. It represented a 3.9 percent improvement from a revised $6 billion December deficit.In a second report Thursday, the Labor Department said the number of newly laid-off workers applying for unemployment benefits fell to 433,000 during the first week of March.
The figure for unemployment claims represented a drop of 27,000 from the previous week, but analysts cautioned that the nation's unemployment rate was still likely to rise from the current six-year high of 7.3 percent in coming months before stronger growth starts sending the jobless level down in the last half of the year.
The Bush administration hailed the lower trade deficit as good news, with new Commerce Secretary Barbara Hackman Franklin insisting that despite recent declines in export growth, the long-term trend for America's overseas sales remained positive.
She said that over the past 12 months exports have risen by 7 percent, showing "growing U.S. competitiveness in world markets. This is particularly important since the export environment in 1992 is likely to be especially challenging due to slower economic growth among key trading partners."
Many private economists believe that an economic slowdown in America's major overseas markets will cut significantly into the export gains this year, while an improving economy will boost U.S. demand for imports.
Such a development would represent a threat to the modest economic rebound that is apparently under way.
Marilyn Schaja, an economist at Donaldson, Lufkin & Jenrette, said that the slight January decline in imports "fits with the weakness that was still apparent in the economy during the month. It seems that the economy really seemed to have picked up during February."
The January trade deficit, the lowest since a $4.17 billion gap in November, reflected the fact that exports were down by 1 percent to $35.54 billion while imports fell by 1.4 percent to $41.30 billion. The trade deficit is the difference between those two figures.
For all of last year, the trade deficit posted a dramatic improvement, falling to $66.26 billion, the first time in eight years that it has been below $100 billion.
For January, the largest deficit occurred with Japan, an imbalance of $3.82 billion, or two-thirds of the total. The second biggest imbalance was with China, a deficit of $1.4 billion.
The 1.4 percent decline in imports was led by an 8 percent drop in petroleum imports, which fell to $3.62 billion in January.
On the export side, farm shipments were down $283 million, with soybeans suffering the biggest decline, a drop of $113.9 million.
If the January deficit held for the entire year, it would give the country a merchandise trade gap of $69 billion, up slightly from last year's $66.26 billion imbalance.