By Doug Palmer
WASHINGTON (Reuters) - Initial claims for U.S. jobless benefits hit a four-month low last week, while the trade gap narrowed more than expected in September, hopeful signs for an economy that has been stuck in a slow-growth rut.
The number of workers filing initial claims for unemployment benefits fell to a seasonally adjusted 435,000 in the week to November 6 from a revised 459,000 for the prior week, the Labor Department said on Wednesday.
The bigger-than-expected dropped was underscored by the four-week moving average of claims which fell to its lowest since just before Lehman Brothers filed for bankruptcy in September 2008 in the depths of the financial crisis.
Meanwhile, a separate Commerce Department report showed the U.S. trade deficit narrowed more than expected in September, despite near record imports from China, as a weak U.S. dollar helped American exports grow for the third consecutive month.
A narrower deficit is positive for U.S. economic growth since it suggests more demand is being met by U.S. production.
A third government report showed a jump in petroleum prices in October pushed overall import prices to their highest since April, but the rise was less than analysts expected.
U.S. stock index futures turned positive after the reports, while U.S. Treasury debt prices added to losses. The U.S. dollar added to gains against the euro and yen.
"Jobless looks a little better than expected. The trend seems to be getting better, though certainly there's way too many as far as unemployed out there," said Jay Suskind, senior vice president at Duncan-Williams in Jersey City, New Jersey.
The monthly trade gap totaled $44.0 billion, down from a revised estimate of $46.5 billion in August.
Wall Street analysts had expected the deficit to narrow to about $45.5 billion.
U.S. exports rose a bare 0.3 percent to $154.1 billion. But that still was the highest since the depths of the financial crisis in August 2008, and included record services exports of $46.5 billion.
President Barack Obama, who is on a trip to Asia intended partly to boost U.S. trade, has set a goal of doubling exports over the next five years to create millions of jobs.
With Obama and Congress under pressure to cut spending and the huge budget deficit, many experts see trade as one area where the federal government can help foster economic growth.
U.S. imports, in a sign consumers and businesses are cutting back on purchases of foreign goods, fell 1.0 percent in September to $198.1 billion.
The rise in exports and decline in imports suggests a drop in the value of the dollar "might be beginning to weave its magic," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, New York.
A weaker dollar helps U.S. exporters by making American products cheaper in world markets, while at the same time increasing the cost of foreign goods in the United States.
However, imports of advanced technology products set a record in September, as did the U.S. trade deficit in that key trade sector, raising concern the United States is losing its edge in industries such as computers and telecommunications, nuclear energy, life sciences and biotechnology.
CHINA IMPORTS STILL NEAR RECORD
U.S. imports from China totaled $35.0 billion, just barely below a record set in August, while U.S. exports to the country declined fractionally to $7.2 billion.
The resulting $27.8 billion trade deficit with China, by far the largest the United States had with any trade partner, could revive chances for the Senate to vote on legislation punishing some Chinese imports for Beijing's currency practices.
The House of Representatives approved that bill in September in the belief that China deliberately undervalues its currency to give Chinese companies an unfair trade advantage.
Many observers believe the bill could fall by the wayside following the November 2 congressional election in which Democrats lost control of the House. But some think its fate depends on whether Obama can make progress with the Chinese on the issue at this week's Group of 20 summit in Seoul.
In the first 9 months of the year, the trade deficit with China has swelled to $201.2 billion, compared to $165.9 billion in the same period in 2009, reviving concerns that huge global imbalances blamed for the global financial crisis are reemerging.
The U.S. trade deficit was $379.1 billion in the first nine months of this year, compared to $270.2 billion in the same period in 2009, putting it on a path to exceed $500 billion in 2010.
(Additional reporting by Mark Felsenthal in Washington and Ryan Vlastelica in New York, Editing by Andrea Ricci)
