Capping the Gusher
On April 20, an explosion on the Deepwater Horizon offshore drilling rig operating off the coast of Louisiana resulted in a fire that sank the rig and caused a large-scale, ongoing oil spill. The explosion killed 11 people and left the uncapped well gushing oil nearly a mile below the water's surface about 40 miles offshore.

"Oil has been gushing from the well for three weeks at the rate of 5,000 barrels (210,000 gallons/795,000 liters) per day, threatening to eclipse the 1989 Exxon Valdez disaster as the biggest U.S. oil spill, and possibly the worst environmental disaster in history," Reuters reported on Thursday. According to some scientists and environmental groups, the leak could "easily be four or five times" this estimate, the New York Times says.

Last week, BP Plc, the majority owner of the leaking undersea well, released a video of the blown-out well that continues to devastate the Gulf of Mexico. The video, released as a giant oil slick has made its way across the Louisiana coast, shows the larger of two existing leaks on the riser. This leak is located approximately 460 feet from the top of the "blowout preventer" and rests on the sea floor at a depth of about 5,000 feet.

The video shows a mixture of oil (darker) and natural gas (lighter), which causes the plume to keep changing colors.

Attempts to contain the leaking undersea well have so far proven elusive.

However, as of this morning, BP engineers "have achieved some success using a mile-long pipe to capture some of the oil and divert it to a drill ship on the surface some 5,000 feet above the wellhead," the Times reports. Yesterday, a senior executive vice president of BP said that the company's latest effort was "working as planned."

BP officials pointed out that even if the tube is successful, it will only be a stopgap measure. The real goal, they said, is to seal the well permanently.

Engineers and others can go to the Deepwater Horizon Response Web site and propose their own method for capping the gusher.

5/18 Update: BP has released four more videos after a request from Senators Bill Nelson of Florida and Barbara Boxer of California. BP agreed this week to release all video footage of the spill. Below are videos of the main riser pipe leak: the first is from May 8 (before any intervention); the second is from May 10; the third is from May 15; and the fourth, recorded on May 18, shows the riser pipe with the insertion tube intended to siphon away oil.

End of update

U.S. Trade Deficit Widens in March
The United States trade deficit climbed to $40.4 billion in March, a 2.5 percent increase over the $39.4 billion deficit reported in February and the highest level since December 2008, according to the U.S. Department of Commerce on Wednesday. Exports totaled $146.9 billion and imports were valued at $188.3 billion.

The March goods deficit grew to $52.9 billion, a $1.8 billion gain over the previous month, while the services surplus rose to $12.5 billion, a $0.8 billion increase from February. Goods exports climbed to $102.7 billion in March and goods imports increased to $155.6 billion. Services exports rose to $45.2 billion, while services imports fell to $32.7 billion.

According to the Commerce Department, the monthly increase in exported goods was largely due to gains in industrial supplies and materials ($2.1 billion); other goods ($0.9 billion); consumer goods ($0.7 billion); and capital goods ($0.5 billion). Monthly import gains were driven by industrial supplies and materials ($3.6 billion); automotive vehicles, parts and engines ($1.2 billion); and consumer goods ($0.5 billion).

The March surge in imports and exports signaled a strengthening global economy and was a positive indicator for U.S. demand, particularly in manufactured goods and industrial supplies.

"U.S. manufacturers, the standout performers so far in this recovery, will continue to get a boost from rising demand for their products, economists predicted," the Associated Press reports. "Their sales are being helped by a rebound in the global economy and declines in the value of the dollar against other major currencies."

However, concerns remain over the impact the trade gap will have on the overall U.S. economy in the long-term future and how the European debt crisis will affect international trade.

"Trade will likely subtract from growth in coming quarters," the Wall Street Journal explains. "The recent turmoil in Europe could hurt trade flows in the future as well, which could hamper U.S. growth. But economists don't see a threat of that for now."

Factory Production and Business Inventories Up in April
Following a 0.2 percent increase in March, total output for the nation' factories, mines and utilities increased 0.8 percent last month, despite a 1.3 percent decline in utility production due to mild temperatures, the U.S. Federal Reserve reported on Friday.

U.S. manufacturing output surged in April, up 1 percent for the second consecutive month. The increases in manufacturing continued to be broadly based across industries. Manufacturing output has increased 1 percent or more in four of the past six months.

"The industrial sector is benefiting from increased domestic demand, a strong export expansion, and to an important extent from a cyclical inventory swing," Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI, said in an analysis of the Fed report. "Many industries are struggling to ramp up production fast enough. The widespread manufacturing rebound is evident from the fact that 17 of the 20 major manufacturing industry groups grew in April and one industry was flat."

Total industrial output in April was 102.3 percent of its 2002 average and 5.2 percent above its year-ago level. The capacity utilization rate for total industry advanced 0.6 percentage points to 73.7 percent, 6.9 points below the average from 1972 to 2009, but 4.5 percentage points above the rate from a year earlier.

In a separate report on Friday, the Department of Commerce said the inventory-to-sales ratio fell to 1.24 in March, matching the record low. Business inventories grew for the third consecutive month in March. According to the Commerce Department, inventories rose 0.4 percent and total business sales gained 2.3 percent — the sixth straight monthly increase and the best showing in four months.

"The current supply chain is exceptionally lean as firms very cautiously expand production in response to the sudden pick-up in orders. Inventories, nevertheless, have increased only modestly because materials are consumed in expanding production and supply availability has limited the ability to increase stocks," Meckstroth said.

Jobless Claims Inch Downward
First-time jobless claims in the week ending May 8 fell to 444,000, a decrease of 4,000 from the previous week, while the four-week moving average for new initial claims dropped by 9,000 down to 450,500, according to the U.S. Department of Labor on Thursday. Minus seasonal adjustments, initial claims actually rose by 11,132 to reach 407,267.

"After dropping steadily last year from a peak of 651,000, first-time claims have fluctuated at around 450,000 since January," the Associated Press reports. "Many economists would like to see claims fall faster, which would be a sign of more hiring."

Although more employers are hiring than during the same period last year, job growth has not made any significant improvements to the unemployment rate. Experts estimate that initial jobless claims would have to fall below approximately 400,000 to indicate a healthy job market.

"[I]t's far from clear whether recent hiring trends are sustainable given a fragile econom[ic] recovery," MarketWatch explains. "Many consumers are still saddled with large debts and the jolt from the massive federal stimulus program could wear off later this year. Many businesses are reluctant to hire in a big way until they see demand for their goods and services pick up."