Plus: Industrial Production Rises Slightly and Weekly U.S. Jobless Claims Drop.

U.S. Trade Deficit Jumps in May
The United States trade deficit jumped 15 percent in May, topping $50 billion for the first time since October 2008, according to the U.S. Department of Commerce last week. Total May exports dropped from $175.8 billion in April to $174.9 billion in May and imports rose from $219.4 billion in April to $225.1 billion in May, resulting in a goods and services deficit of $50.2 billion, up from the revised $43.6 billion total in April.

Economists surveyed by Bloomberg News were expecting a deficit ranging from $40 billion to $48 billion, while economists surveyed by MarketWatch had forecast the trade deficit to rise to $44.5 billion.

The month-over-month decrease in exports reflected lower sales of industrial supplies and materials ($1.8 billion); consumer goods ($0.4 billion); and foods, feeds and beverages ($0.1 billion). The rise in imports reflected increases in industrial supplies and materials ($4.3 billion); capital goods ($1.2 billion); automotive vehicles, parts and engines ($0.6 billion); and foods, feeds and beverages ($0.1 billion).

“Crude oil imports were up more than 10 percent in May because of strong volume and higher prices, totaling $29.4 billion. The deficit in petroleum goods was $30.4 billion, making it the highest since October 2008, when it was $34.5 billion,” the New York Times explains. “Consumer demand in the United States appeared weaker, resulting in a slack growth of less than 1 percent for non-pharmaceutical consumer products.”

Industrial Production Up Slightly in June
Industrial production rose slightly in June, the first increase in two months, the Federal Reserve reported on Friday. At 0.2 percent, the growth rate was slower than the 0.5 percent consensus increase forecast by economists polled by MarketWatch.

For the second quarter as a whole, total industrial production increased at an annual rate of just 0.8 percent, due mostly to the supply disruptions caused by the Japanese disasters earlier this year.

“The aftershocks of the Japanese tsunami are still reverberating through the U.S. motor vehicle and electronics industries in the form of parts shortages,” Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI, wrote in an analysis of the Fed report. “A relapse in the housing recovery also set back several housing-related manufacturing industries.”

In June, 12 of the 20 manufacturing industries declined. Ultimately, manufacturing production was unchanged from May, with a year-over-year increase of 3.7 percent, and manufacturers’ capacity utilization figures also remained unchanged.

“Manufacturing production outpaced the economy early in the year, increasing at a 7.2 percent annual rate in the first quarter of 2011, while GDP only increased at a 1.9 percent rate,” Meckstroth continued. “In the second quarter, manufacturing production has nearly ground to a halt (0.2 percent annual rate) while overall economic growth is again expected to be 1.9 percent.”

Meanwhile, the output of mines rose 0.5 percent in June, while the output of utilities climbed 0.9 percent.

At 93.1 percent of its 2007 average, total industrial production in June was 3.4 percent above its year-earlier level.

“Overall, these numbers show an economy the struggled mightily in the second quarter of 2011,” Chad Moutray, chief economist at the National Association of Manufacturers (NAM), wrote at NAM’s Shopfloor blog. “While I continue to be optimistic about the third and fourth quarters of this year, it is definitely a cautious optimism.

Weekly U.S. Jobless Claims Drop
New unemployment benefit applications dropped by 22,000 to 405,000 in the week ending July 9, falling from the previous week’s upwardly revised figure of 427,000, according to the U.S. Department of Labor on Thursday. Economists surveyed by MarketWatch had expected the latest weekly figure to total 420,000.

The decline in claims would have been even steeper if not for a government shutdown in Minnesota, where 11,500 state workers filed applications for jobless benefits in the latest week, the Labor Department noted.

“[I]t was the 14th week in a row that U.S. jobless claims held above the 400,000 mark, after dropping below that threshold from February to April in a trend that had encouraged hopes that a struggling economic recovery was gaining traction,” Agence France-Presse reports.

Generally, requests must fall below 400,000 to indicate healthy job growth and strong hiring conditions.

The four-week moving average — which is considered a more accurate measurement of employment trends — was 423,250, a decrease of 3,750 from the previous week.