The international trade report for October showed exports declining 1.8% and imports rising 1.3%, bringing the total deficit to $42.6B, which was higher than expectations and will be a drag on fourth quarter GDP. Goods exports were down $1.4B for the month, with softness in all categories. Services exports have counteracted the $63.4B trade deficit in goods with a surplus of $20.8B. The trade gap widened with most regions such as the EU and Mexico, although the gap with China narrowed thanks to increased US exports to that country. On the imports side, the $231.3B in imports shows the heaviest US buying since August last year.

Jobless claims for the December 3 week remained at very low levels. Continuing claims fell by 79,000 to 2.005M, and initial claims fell by 10,000 to 258,000, the fifth straight double-digit swing. Despite recent volatility in this weekly indicator, the 4-week average is down for the month, pointing to overall strong demand for labor.

In the December 2 week, crude oil inventories fell 2.4M barrels, bringing the Y/Y gain at 7.1%. Product inventories both rose, with gasoline up 3.4M barrels, a 5.5% Y/Y gain, and distillate fuel up 2.5M barrels, up 4.9% Y/Y. Refineries operated at 90.4% capacity, a 0.6% increase from the prior week. Demand averaged 19.6M barrels per day, which is down 1.0% Y/Y.