U.S. Economy: Trade Falters, Claims at 26-Year High (Update1)

By Bob Willis and Timothy R. Homan

Dec. 11 (Bloomberg) -- U.S. exports slid to a seven-month low and the number of Americans filing claims for unemployment benefits surged to the highest level since 1982, signaling the economy is shrinking even faster than previously estimated.

The export slump, caused by recessions spreading through U.S. trading partners, spurred a widening in the trade deficit to $57.2 billion in October, a Commerce Department report showed in Washington today. Initial jobless claims rose more than forecast to 573,000 in the week ended Dec. 6, the Labor Department said.

Rising joblessness will deepen the pull-back in spending by consumers, and the worsening trade balance removes what had been a source of support for an economy that’s been in a recession for a year. The Bush administration said the Labor report shows why U.S. senators should approve an emergency loan for automakers, to prevent a bigger hit to jobs from that industry’s collapse.

“We’ve yet to see the deepest monthly loss of jobs for the current recession, and that’s somewhat frightening,â€