MNI DATA IMPACT: US Apr Trade Gap Narrowed To -$50.8b>

--Initial Jobless Claims Unch At 218k in June 1 Week After Upward Rev

--US 1Q Productivity Rev Down To 3.4%, ULC Rev Down Sharply To -1.6%

By Kevin Kastner and Harrison Clarke

     WASHINGTON (MNI) - The international trade gap narrowed to $50.8 

billion in April from a revised $51.9 billion gap in March, about as 

expected, based on data released by the Commerce Department Thursday. 

     The Bloomberg survey had expected a $50.7 billion gap in April, 

while the MNI survey with on target with an expectation of a $50.8 

billion deficit. 

     Also released on Thursday, the level of initial jobless claims was 

unchanged at 218,000 in the June 1 week, slightly above the 216,000 

level expected, but lowering the four-week average again. The followed 

an upward revision in the previous week as estimated claims from the 

shortened reporting week last week were replaced with actual data. 

     Also, first quarter nonfarm productivity was revised down slightly 

to a 3.4% pace of growth from the previously reported 3.6% gain, while 

unit labor costs were revised down sharply to a 1.6% pace of decline 

from the 0.9% decrease in the preliminary estimate. 

     Here are some of the key takeaways from the data released Thursday:

     - The unadjusted gap with China widened to $26.9 billion in April 

from $20.7 billion in March. There was a wider gap after seasonal 

adjustment as well. For the other major trading partners, there were 

larger gaps with the EU, Canada, and Japan, while there was a smaller 

gap with Mexico. 

     - The Census goods gap was revised lower to -$70.9b from the 

advance reading of -$72.1b that was incorporated into the previous 

estimate of first quarter GDP. 

     - Imports decreased on declines in all major categories, with 

capital goods ex. autos posting the largest decline (-$1.7b), followed 

by consumer goods (-$1.1b). At the same time, exports fell on declines 

in capital goods ex. auto (-$2.7b, -$2.3b aircraft), autos, and consumer 

goods, partially offset by gains in foods, feeds and beverages and 

industrial supplies and materials. 

     - The four-week moving average for claims fell by 2,500 to 215,000 

in the June 1 week and would be expected to rise next week as a 212,000 

level in the May 11 week rolls out. 

     - Continuing claims rose by 20,000 to 1.682 million in the May 25 

week. Even so, the four-week average fell by 1,000 to 1.673 million. The 

rate of insured unemployment was 1.2%, unchanged from last week and the 

year-ago rate. 

     - Q1 output growth was revised down slightly to a 3.9% pace from 

the 4.1% preliminary estimate, while hours worked growth was unrevised 

from the 0.5% rate in the preliminary estimate. 

     - Q1 compensation growth was revised down to a 1.8% pace from the 

previously reported 2.6% rate, while real compensation growth was 

revised down to 0.9% from 1.7% in the preliminary estimate. There were 

downward revisions to the Q4 readings as well, adding to concerns of 

slowing wage inflation.

     - The year/year pace of productivity growth was unrevised from the 

2.4% rate in the preliminary estimate, and was still up from the 1.7% 

year/year rate in the previous quarter. Unit labor costs now stand 0.8% 

lower than they were a year ago, a sharp downward revision from the 0.1% 

year/year gain in the preliminary report, following a 0.4% year/year 

gain in the fourth quarter. The Q1 rate of decline was the largest since 

Q4 2013.

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]