In the week ended November 8, initial claims rose to the highest level in seven years. Initial claims increased 32 000 from an upwardly revised 484 000 to 516 000. Continuing claims, reported with a one-week lag, rose 65 000 from a downwardly revised 3 832 000 to 3 897 000, the highest level since January 1983. These figures clearly indicate that the economy is in a recession and a further worsening in labour market conditions is likely.
The trade deficit narrowed more than expected in September (from -$59.1 B to - $56.5B). As traditional for periods of recession, both exports and import declined, with imports falling by a record 5.6% and exports suffering their steepest drop since September 2001. Excluding petroleum, the deficit widened from -$23.44B in August to -$24.34B in September, which indicates that the improvement in the trade balance was partially due to lower oil prices. Both imports and exports are expected to decline further in the coming months.
