The U.S. economy showed signs of resilience according to data released on Thursday, with exports surging to a record in August and a weekly labor market gauge showing the number of longer-term unemployed unexpectedly fell.
But import prices rose slightly more than expected, keeping the threat of future inflation pressures in play.
U.S. Treasury bonds extended losses on these signs that U.S. economic activity might be brisker than some economists feared.
Yet some more recent data released on Thursday told a different story. Many of the leading U.S. retailers, hurt by unusually warm weather, reported dismal September sales that missed Wall Street's expectations, prompting some to cut their outlook for the entire quarter.
The U.S. trade deficit narrowed more than expected in August to $57.6 billion, as the weak U.S. dollar and stronger growth overseas helped push exports to a record, a U.S. Commerce Department report showed on Thursday
"If the September trade figure were to come in close to August, it would add 1 percent to Q3 GDP (gross domestic product), bringing it to roughly 3 percent," said Keith Hembre, chief economist with FAF Advisors in Minneapolis.
Wall Street analysts had pegged the August trade gap at $59 billion, down slightly from the previously reported figure of $59.25 billion for July, which the Commerce Department revised on Thursday to $59 billion.
The trade deficit might have narrowed further if not for record oil import prices. Imports fell slightly to $195.9 billion from the record set in July, while the average price for imported oil jumped to a record $68.09 per barrel.
U.S. exports of goods and services rose for the sixth consecutive month to a record $138.3 billion, led by record shipments in several categories, including overall goods; overall services; foods, feeds and beverages; industrial supplies and materials; and consumer goods.
Regarding the U.S. labor market, Thursday's weekly jobless claims numbers reinforced the impression from a fairly robust monthly report released last week that the jobs market was holding in more firmly than anticipated. The claims report showed the number of long-term unemployed falling to its lowest level since June.
"It looks as if companies are maintaining their labor forces, not reducing them, which is good news heading into the holiday shopping season," said Gary Thayer, chief economist at A.G. Edwards and Sons in St. Louis, Missouri.
The number of U.S. workers filing new claims for jobless aid fell a larger-than-expected 12,000 last week, the Labor Department report said. Initial claims for state unemployment insurance benefits fell to 308,000 in the week ended October 6 from an upwardly revised 320,000 the prior week, and roughly on par with the same period a year ago
The number of so-called continued claims fell for the second straight week, dropping by 15,000 to 2.52 million in the week ended September 22, the latest period for which figures were available. Economists had forecast a rise to 2.55 million.
The Labor Department also reported that September import prices rose by 1.0 percent, above economists' consensus forecast for an 0.9 percent rise.