WASHINGTON — The outlook for U.S. economic growth is looking slightly better, as American businesses sold a record number of goods and services in Europe, China and other foreign markets in February, while imports declined.
The U.S. trade deficit narrowed more than 12 percent in February to $46 billion. That's down from $52.5 billion in January, the widest deficit in 31/2 years.
Exports rose to a record $181.2 billion, while imports dropped to $227.2 billion.
A smaller trade deficit reduces the drag on growth. More exports help the economy grow because they typically boost factory production, which can fuel more hiring and lead to greater consumer spending.
And fewer imports subtract less from growth, largely because consumers are spending less on overseas goods and services.
Most economists were encouraged by the trade report, as well as a report earlier this week that said wholesale businesses restocked at a faster pace in February. That also meant factories were busier because businesses anticipated more consumer spending in the months ahead.
Craig Alexander, chief economist with TD Bank Financial Group, now expects first-quarter growth at an annual rate of 2.3 percent, up from his initial 1.9 percent forecast.
"The basic story hasn't changed," Alexander said. "The story is continued modest economic growth and a gradual improvement in the labor market."
The jobs pictured dimmed a little last week after the government said hiring slowed in March to half the pace of the previous three months.
The Labor Department offered more disappointing news Thursday: The number of people seeking weekly unemployment benefits jumped last week by 13,000 to a seasonally adjusted 380,000 — a 10-week high.
The four-week average, which smooths week-to-week fluctuations, rose to 368,500. After steadily declining since last fall, applications have leveled off in recent weeks. The four-week average is essentially unchanged over the past two months.
Most economists are waiting to see April's hiring figures before declaring the job market has weakened.