Plus: U.S. Worker Productivity Drops in Q2 and Initial Jobless Claims Dip Below Key Level.

Trade Deficit Widens Unexpectedly
The United States trade deficit in June jumped to its widest point since fall 2008 as exports tumbled faster than imports, according to the U.S. Department of Commerce last week. The trade gap widened 4.4 percent, from an upwardly revised $50.8 billion in May to $53.1 billion in June.

“The big rise in June’s deficit came as a surprise to economists who had been forecasting an improved deficit based on their belief that oil prices would fall, lowering imports, while exports would recover from a May decline which had been the first setback after 10 monthly gains,” the Associated Press reports.

Most analysts had “penciled in an average estimate of $48 billion, on a seasonally adjusted basis,” according to Agence France-Presse.

Slower exports helped expand the country’s foreign trade deficit to the widest shortfall since October 2008. Overseas shipments by U.S. firms fell 2.3 percent to a seasonally adjusted $171 billion in June from May, marking the second consecutive monthly decline and a sharp drop that reflects a slumping global economy. Meanwhile, imports dipped 0.8 percent to $224 billion in June.

“Total U.S. exports of goods and services were up 16 percent over the first half of 2010, staying ahead of the 15 percent annual rate necessary to reach the goal of doubling exports by the end of 2014,” Frank Vargo, VP for international economic affairs at the National Association of Manufacturers (NAM), wrote at NAM’s Shopfloor.org blog. “Manufactured goods exports, however, have slipped below this target rate, rising 12.8 percent over the first half of 2010.”

According to Vargo, last week’s trade figures suggest that the Obama administration needs to “examine its actions to reach the goal of doubling U.S. manufactured goods exports and enable their more rapid growth.”

U.S. Worker Productivity Drops in Q2
U.S. workers were less productive in the second quarter compared with the first quarter of 2011, according to the U.S. Department of Labor. From April through June, the productivity of U.S. workers dropped at a 0.3 percent annual rate after falling 0.6 percent in the January-March period, leading to an increase in labor costs that may restrain gains in profits.

The median estimate of 60 economists surveyed by Bloomberg News projected a 0.9 percent decrease.

“Productivity fell in the three months through June because the number of hours that employees worked rose faster than the amount of goods and services generated,” MarketWatch explains.

The back-to-back drop in productivity was the first since the third and fourth quarters of 2008. Output increased 1.8 percent and hours worked rose 2 percent.

The manufacturing sector was hardest hit, with productivity falling 2 percent as output rose 0.6 percent and hours worked jumped 2.6 percent, “reflecting the inability of companies to meet demand with their existing workforces,” MarketWatch says.

Meanwhile, unit labor costs — which reflect how much it costs a business to produce one unit of output — rose 2.2 percent in the second quarter, following a 4.8 percent gain in the first quarter, the biggest in more than two years.

Jobless Claims Dip Below 400,000
For the first time since April, new U.S. jobless claims fell below the crucial 400,000 level in the latest week reported, the U.S. Department of Labor said last week. In the week ending Aug. 6, the number of people who applied for unemployment benefits dropped by 7,000 to a seasonally adjusted 395,000.

Generally, requests must fall below 400,000 to indicate healthy job growth and strong hiring conditions. They had been above 400,000 for the previous 17 weeks.

The four-week average, a less volatile figure, fell by 3,250 from the previous week to 405,000, the lowest level since mid-April.

The total number of Americans drawing unemployment benefits dropped by nearly 90,000 in the latest week to 7.5 million, barely half of the nearly 14 million unemployed in the country, AFP notes.

According to a separate Labor Department report last week, employers posted more job openings in June and layoffs fell. The number of available jobs rose from 3.03 million in May to 3.11 million in June. Overall job openings at U.S. workplaces rose 16 percent from the prior year. “The relatively low number of job openings — unfilled, posted vacancies that non-farm employers plan to fill within 30 days — is helping keep the U.S. unemployment rate high,” Reuters explains.