The US trade gap widened in September as a hungry economy drew in record imports and new jobless claims last week stayed at levels not seen since before the 2001 recession, according to reports on Thursday offering more suggestions the economy had turned a corner.
However, the good news was tempered by sobering comments from Wal-Mart Stores Inc, the world's largest company, which sent US stocks tumbling.
The US trade deficit widened 4.4 percent to US$41.3 billion as imports from China and the rest of the world rose to record levels, the Department of Commerce said.
Separately, initial claims for jobless aid rose 13,000 to 366,000 in the week ended Nov. 8 from a revised 353,000 the prior week, the Department of Labor said.
While claims rose, a four-week moving average of the data -- which smooths weekly volatility to provide a better view of labor-market trends -- dropped by 6,000 to 375,250, its lowest level since early March 2001, when the economy tumbled into recession.
"The jobless claims numbers continue to hold at a comparatively low level," said Gary Thayer, chief economist at AG Edwards & Sons in St. Louis, Missouri. "We've probably seen the worst on the employment situation."
Both the trade and jobless claims data were close to Wall Street's expectations, and the US bond market showed little reaction. However, the dollar fell as the data fueled concerns global trade imbalances could grow -- a dollar negative -- with US growth outstripping growth overseas.
But comments from Wal-Mart and No. 2 retail discount chain Target Corp offered a reminder the US economy was likely to slow sharply from its torrid third-quarter pace -- when US GDP raced ahead at a 7.2 percent annual rate, the fastest in nearly two decades.
Both retail giants forecast a fiercely competitive holiday shopping season.
In a recorded message, Wal-Mart chief executive Lee Scott said consumers were buying the lowest-priced items, suggesting budgets were tight ahead of the holidays.
"I don't think consumer spending is slowing, but I also don't see the strength that many ... in the investment community appear to see," he cautioned.
While consumer spending was robust in the July to September period, government data shows spending began to cool as the third quarter drew to a close.
"The Wal-Mart numbers leave open the question `is this just a breather in consumer spending or is it the start of the long-awaited consumer spending recession?'" said Cary Leahey, senior US economist at Deutsche Bank Securities.
The big question for the US economy has long been when would business spending pick up enough to bolster the economy should consumers retrench. Signs that business capital spending has been on the rise have been greeted warmly.
The first widening in the trade deficit in six months came as surging imports outstripped the biggest increase in exports in over three years.
America's largest manufacturing group welcomed the export rise, which reflected improving economies overseas and a weaker dollar.
"Given the sharp decline in exports in recent years, this is heartening news," National Association of Manufacturers (NAM) president Jerry Jasinowski said in a statement.
NAM and other manufacturing groups have been pressing the Bush administration to do more to protect US factories from what they see as unfair competition from China, which pegs its currency to the US dollar, denying the benefits a weaker greenback could offer American producers.