U.S. Trade Deficit Narrows Amid Unsteady Labor Market

The U.S. labor market shows signs of easing with a slight rise in unemployment benefit claims, while a separate report reveals a narrowing trade deficit due to declining imports. Economists forecast continued fluctuations in trade data and employment trends as the new administration's policies unfold.

The American labor market is showing mixed signals as initial jobless claims increased slightly last week, highlighting a trend of gradual easing, according to new data from the Labor Department. This comes as sluggish hiring persists, with some workers staying on unemployment benefits longer.

At the same time, the U.S. trade deficit contracted significantly in October, propelled by a notable drop in imports, especially in goods and capital items. This development might give a temporary boost to economic growth in the current quarter, amid concerns over future tariffs from the incoming administration.

Economists remain cautious, predicting potential volatility in both trade and the labor market into 2025. The upcoming policies on tariffs and tax could further affect these sectors, while steady layoffs indicate resilience in job growth despite earlier Fed interest rate hikes.

(With inputs from agencies.)