Exports bright spot for U.S.

First Posted:

WASHINGTON — The outlook for U.S. economic growth is looking slightly better.

American businesses sold a record number of goods and services in Europe, China and other foreign markets in February, while imports declined.

Many economists began raising their forecasts for January-March growth after seeing Thursday’s government report on the lowest trade deficit since the fall.

The economy still has a long way back to full health. More people applied for unemployment benefits last week, the government said in separate report. That followed last week’s report that hiring slowed sharply in March after three months of strong job growth.

The mixed economic picture, along with tame inflation cited in a third report, gives the Federal Reserve more ammunition to stick with its plan to hold interest rates near record lows when it meets later this month.

“The underlying message is actually a good one,” said Paul Dales, senior U.S. economist at Capital Economics, after the trio of reports was released. “It suggests that growth is a bit stronger.”

The U.S. trade deficit narrowed more than 12 percent in February to $46 billion. That’s down from $52.5 billion in January, the widest deficit in three and a half years.

Exports rose to a record $181.2 billion.

Dales said he expects growth only slowed in the January-March quarter to an annual rate of 2.5 percent. While that’s down from 3 percent annual rate at the end of last year, it’s better than the 2 percent rate he had initially projected.

The number of people seeking weekly unemployment benefits jumped last week by 13,000 to a seasonally adjusted 380,000 — a 10-week high.

Most economists are waiting to see April’s hiring figures before declaring the job market has weakened.

The unemployment rate has fallen from 9.1 percent in August to 8.2 percent last month.