The U.S. labor market revealed surprising strength Friday, suggesting that economic growth may have begun to accelerate.
According to the Labor Department, U.S. employers added 203,000 positions to their payrolls in November. That means the economy added an average of 204,000 new workers per month between August and November. That’s up more than 28 percent from the previous 4-month average of 159,000 new jobs.
November’s hiring spree pushed the U.S. unemployment rate down three-tenths of a point to a five-year low of 7 percent.
And the Institute for Supply Management announced this week that its closely watched index of U.S. manufacturing activity rose in November to its highest level in 2-and-a-half years. The ISM report also revealed that U.S exports increased at the fastest pace in nearly two years.
And that development was corroborated earlier this week when the government released its latest estimates on global trade.
The Commerce Department reported this week that America’s cavernous trade deficit narrowed in October to $40.6 billion. That’s down 5.4 percent from September and the improvement beat preliminary estimates.
U.S. Exports rose by 2.7 percent to a record $192.7 billion. Total imports, meanwhile, increased modestly by 0.4 percent to top $233 billion.
The improvement was powered by a 6 percent increase in petroleum exports. Lower global oil prices along with an increase in domestic energy production allowed for an 11.1 percent decrease in petroleum imports during the same time period.
Controversial new drilling methods like hydraulic fracturing, or fracking, have helped breathe life into domestic energy production, thereby lessening America’s dependence on foreign oil.
Smaller trade deficits can boost economic growth because they generally indicate that U.S. companies are earning more from sales overseas while U.S. consumers are buying fewer products from their foreign competitors.
Through the first ten months of 2013, the trade deficit was 10.6 percent below last year’s pace. Most of that can be attributed to a gain in exports while imports hovered at 2012 levels.
The rise in exports comes on the heels of three months of declines. Analysts predict exports will continue to rise due to modest economic recoveries in Europe and Asia.
U.S. exports to China soared to an all-time high of $13.1 billion in October. But Chinese exports to America also set a record at $41.9 billion. The resulting $28 billion trade deficit with China is America’s largest monthly imbalance with any single country.
But agriculture continues to be a bright spot in the U.S. trade picture.
China’s increased price supports for its farmers actually have eroded its competitiveness in the global marketplace. The U.S. appears to have capitalized on the opportunity and the USDA reports American agricultural exports soared to a record high of $140.9 billion in fiscal 2013.