Plus: Weekly Jobless Claims Rise and Worker Productivity Slows.

U.S. Trade Gap Shrinks as Exports Hit Record High
The United States trade deficit shrank 6.7 percent in April to $43.7 billion, the lowest level since December, after American manufacturers shipped a record $175.6 billion in goods and services overseas, the U.S. Department of Commerce reported last week. The deficit in March was revised down to $46.8 billion from $48.2 billion.

“American companies sold more computers, heavy machinery and telecommunications equipment in foreign markets in April, pushing exports to a record high,” the Associated Press explains. “Imports declined, reflecting a big drop in auto imports from Japan caused by supply disruptions from the March earthquake and tsunami.”

In April, goods exports jumped $2 billion to total $126.4 billion and services exports rose $0.2 billion to $49.1 billion. Total imports slipped 0.4 percent from March, to $219.2 billion.

According to the Commerce Department, the March-to-April increase in goods exports reflected greater sales of industrial supplies and materials, capital goods and consumer goods, while the decline in imports was caused, in part, by a decrease in automotive parts, vehicles and industrial supplies and materials.

The new numbers suggest stronger second-quarter economic growth than economists had initially expected. “A lot of forecasters, ourselves included, had lowered expectations for the second quarter, and [last week's data] will reverse some of that reduction in expectations,” David Resler, chief U.S. economist at Nomura Securities International in New York, tells Reuters.

Weekly Jobless Claims Rise Slightly
Unemployment benefit applications rose by 1,000 to a seasonally adjusted 427,000 in initial claims in the week ending June 4, reflecting a still-struggling economic recovery, according to the U.S. Department of Labor. Economists polled by MarketWatch had forecast initial claims to fall to 419,000.

Generally, requests must fall below 400,000 to indicate healthy job growth and strong hiring conditions. Jobless claims have exceeded 400,000 for nine weeks.

The Labor Department also reports that the four-week moving average — which is considered a more accurate measurement of employment trends — has fallen by 2,750 to 424,000 from the previous week.

The latest surge in jobless claims reflects a continued decline in hiring. Only 54,000 jobs were added last month, down sharply from the 232,000 gain reported for April.

Worker Productivity Slows in Q1
U.S. workers’ productivity slowed as labor costs rose in the first quarter of 2011, according to the U.S. Department of Labor last week.

Non-farm labor productivity increased at a 1.8 annual rate, down from 2.9 percent in the fourth quarter of 2010, while labor costs rose at a 0.7 percent rate after a 2.8 percent drop in Q4 2010.

In the manufacturing sector, productivity grew 4.2 percent in Q1 2011, as output and hours worked increased 7.7 percent and 3.3 percent, respectively.

The New York Times notes that since the economic downturn, production levels have risen but hiring has remained below where many experts expected it to be. “Since the recovery began, businesses’ spending on employees has grown 2 percent as equipment and software spending has swelled 26 percent,” the Times says.