Economic Indicators: Finding Good in The Bad

The figures seem dismal but hide some positive news.

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This morning, two new datapoints seem to indicate trouble on the economic horizon. The U.S. trade deficit grew by more than 14 percent in March, to $51.8 billion—the fastest rise in nearly a year. Meanwhile, new jobless claims remained flat, declining by 1,000 last week.

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A trading deficit means that Americans are buying more from foreigners than they are selling to them. But a deeper dive into the numbers shows that things are not as bad as they seem.

Imports rose by 5.2 percent, but exports also grew by 2.9 percent in March. Growth in exports is positive for the U.S. economy, as it leads to more jobs, so a narrowing trade deficit is not always better than one that is growing fatter, says Alistair Bentley, economist at TD Economics, writing in a commentary that "the widespread rebound in imports and exports in March was very encouraging following the declines in trade volumes during February."

The Obama administration is taking the glass-half-full view on the figures, focusing on this growth in exports.

"This month's data show that U.S. exports have continued to increase this year, despite some tough economic conditions abroad, confirming the historic progress we are making on the path to achieving President Obama's goal of doubling exports by the end of 2014," U.S. Commerce Secretary John Bryson said in a statement.

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While a growing deficit ultimately can be a drag on economic growth, the current level is no reason to worry.

"There's nothing recessionary about the last couple of months," Bentley said in a phone interview, adding that shrinking the trade deficit is not an immediate concern.

"We don't think it's sustainable at its current level, but it's not an imminent thing. It doesn't have to happen overnight. ... It's not as though if we sustain this for another couple of years we're headed toward some sort of a problem," says Bentley.

Still, more demand for U.S. goods could make for more domestic jobs and help bring down that new jobless claims figure. While last week's new unemployment claims fell by a modest 1,000, the prior week's claims were also revised upward slightly by 3,000.

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Those movements continue a recent, discouragingly flat period for an indicator that saw substantial declines at the end of 2011 and in early 2012.

But once again, there is not quite reason to fret—jobless claims can be volatile, so the four-week moving average is perhaps a better window on what is going on with new unemployment insurance claims. That figure fell by more than 5,000 last week.

Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at dkurtzleben@usnews.com.