It was a light week for U.S. data, with nothing to alter the view that the U.S. economy is firming and the Eurozone economy is stumbling. The U.S. international trade gap widened again in December to -$48.8 billion. The inflation-adjusted balance of trade in goods widened by $0.7 billion ($2005) in December, which implies a small upward revision to the first estimate of 2011Q4 real GDP growth rate of 2.8 percent, if everything else stays the same. There appears to be a disconnect in this month’s trade report, which shows exports of civilian aircraft declining in December despite strong reported overseas deliveries by Boeing. Perhaps we will see an adjustment next month. On a year-over-year basis the trend in trade with the Eurozone is still heading south. Increasing evidence of a moderate-to-hard recession in the southern tier of the Eurozone suggests that exports to the Eurozone will continue to trend down over the coming months. Scandinavia appears to be resistant to the euro-plague so far. Germany is the key to core European growth and may yet succumb to the recessionary downdraft coming from the periphery. Good news from labor data is extending into February as initial claims for unemployment insurance dipped by 15,000 for the week ending February 4, to hit 358,000. Initial claims below 360,000 are associated with monthly job gains in excess of 200,000. The job opening rate for the U.S. continues to trend upward. The University of Michigan consumer sentiment index declined in the preliminary reading for February to 72.5 .
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