Trade deficit grows for U.S.
The deficit in the largest measure of U.S. trade widened in the October-December quarter to the biggest imbalance in more than two years as exports of goods fell at a faster pace than imports.
The Commerce Department said Thursday that the deficit in the current account increased to $113.5 billion, an increase of 14.7 percent from a third quarter deficit of $98.9 billion.
For the entire year, the current account deficit rose 2.6 percent to $410.6 billion. It was the largest annual deficit since 2012.
A widening trade deficit contributed to the slowdown in overall economic growth in the fourth quarter and is expected to be a drag on growth in 2015 as the stronger dollar makes American products less competitive on overseas markets.
Paul Ashworth, chief U.S. economist at Capital Economics, said that the current account deficit will likely narrow in the first quarter, reflecting lower prices for imported oil, but then start rising for the rest of this year.
“The stronger dollar and the relative weakness of economic growth outside the United States suggests the deficit will gradually widen” for the rest of 2015, Ashworth said.
The current account is the broadest measure of trade. It covers not only goods and services but also investment flows.
Mortgage rates fall again this week
Average long-term U.S. mortgage rates fell this week, remaining near historically low levels at the start of the spring home-buying season.
Mortgage giant Freddie Mac said Thursday the national average for a 30-year fixed-rate mortgage declined to 3.78 percent from 3.86 percent last week. The average rate for a 15-year mortgage, popular with homeowners who refinance, slipped to 3.06 percent from 3.10 percent last week.
A year ago, the average 30-year mortgage stood at 4.32 percent and the 15-year mortgage at 3.32 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, designed to hold down long-term rates.
Leading indicactors rise by 0.2 percent
An index designed to predict the future health of the economy rose by a modest amount for a second straight month, indicating the economy’s momentum may have slowed.
The New York-based Conference Board said its index of leading indicators rose 0.2 percent last month, matching the January Increase. The gains in both months were the smallest since the index rose by just 0.1 percent in August.
Analysts said that the smaller increases over the past two months may be signaling a period of more moderate activity.
“Weakness in the industrial sector and business investment is holding economic growth back despite improvements in labor markets and consumer confidence,” Conference Board economist Ataman Ozyildirim said Thursday.
The leading index is composed of 10 forward-pointing indicators. Seven of the 10 indicators increased in February with the biggest support coming from the spread on interest rates, gains in stock prices and an increase in building permits.
The three indicators which subtracted from growth were weekly unemployment benefit applications, weekly manufacturing hours and the index for new orders tracked by the Institute for Supply Management.
In this photo taken Friday, Feb. 6, 2015, U.S. Armed Forces Veterans attend the annual Veterans Career and Resource Fair in Miami. The Labor Department releases weekly jobless claims for the week ending Feb. 28 on Thursday, March 5, 2015. (AP Photo/Alan Diaz) Jobless claims stay below 300,000
Initial jobless claims remained steady last week at just under 300,000, indicating a strong labor market after a late February increase raised concerns that conditions were weakening.
About 291,000 people applied for first-time unemployment benefits last week, up 1,000 from the previous week’s revised total, the Labor Department said Thursday. The figure was in line with analyst expectations.
It was the second straight week with claims below 300,000, a level economists say is consistent with robust job growth.
Claims unexpectedly shot well above 300,000 in the last two weeks of February.
But that now appears to have been a short-term jump, probably influenced by severe weather in some parts of the country.
“In one line: No sign of slowdown here,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said of the jobs market.