By LUCA DI LEO and JEFF BATER The U.S. trade deficit narrowed unexpectedly in October, falling to $32.94 billion as the rise in exports from September of goods such as cars was slightly higher than the increase in imports. The figure, representing the U.S. deficit in international trade of goods and services, is 7.6% lower than the downwardly revised $35.65 billion trade gap the U.S. ran in September, the Commerce Department reported Thursday. Separately, the number of U.S. workers filing new claims for jobless benefits rose more than economists expected last week, the Labor Department said in its weekly report Thursday. Total claims lasting more than one week, meanwhile, fell. Economists surveyed by Dow Jones Newswires had expected the October trade deficit would widen to $37.0 billion. The September trade gap was originally estimated to be $36.5 billion. The real, or inflation-adjusted deficit, used by economists to measure the impact of trade on gross domestic product, fell to $38.0 billion in October from a downwardly revised $41.49 billion in September. U.S. GDP, a broad range of economic activity, rose in the third quarter by an annualized 2.8%, the first increase in more than a year. However, the economy's expansion was limited by a wider trade deficit, with net exports subtracting 0.8 of a percentage point to GDP in the July-September period. Thursday's report showed U.S. exports in October rose 2.6% to $136.84 billion, the highest level in nearly a year, from $133.38 billion the previous month. Imports rose by just 0.4% to $169.78 billion from $169.03 billion in September, but that was still the highest level in U.S. imports since Dec. 2008. The U.S. paid $17.44 billion for crude oil imports in October, down from $19.51 billion the month before. After rising for seven months in a row, the average price per barrel was the lowest since January 2000, falling to $67.39 from $68.17 in September. Crude import volumes fell to 258.83 million barrels from 286.22 million barrels. The total U.S. bill for all types of energy-related imports fell to $22.45 billion in October from $24.87 billion in September. Imports of foreign-made consumer goods rose $1.0 billion in October, with imports of auto and related parts rising by $0.4 billion from September. Purchases of capital goods increased by $1.1 billion. U.S. exports of consumer goods, including artwork and jewelry, rose by $1.0 billion in October compared to the prior month. The value of U.S. exports of industrial supplies, such as steelmaking material and gold, increased by $0.4 billion. Auto and related products exports also rose by $0.4 billion from September. Meanwhile, capital goods exports rose by $1.2 billion in October from the previous month. The U.S. trade gap with China was the highest since Nov. 2008, rising to $22.7 billion in October from the previous month's $22.1 billion. The trade deficit with Japan rose to $4.4 billion from $4.1 billion in September. However, the U.S. trade deficit with some other major trading partners narrowed slightly. The deficit with the European Union fell to $4.9 billion from $5.5 billion a month earlier, while the trade shortfall with Mexico was unchanged at $4.6 billion. Jobless Claims Increase Initial claims for jobless benefits rose by 17,000 to 474,000 in the week ended Dec. 5. The previous week's level was unrevised at 457,000. Economists surveyed by Dow Jones Newswires expected an increase of 8,000 initial claims. An economist at the Labor Department said Thursday that an increase in claims is generally expected during this time of year because it reflects data from the week after Thanksgiving and because construction lay-offs tend to occur in that week. "Generally...that week sees the biggest percentage increase in initial claims over the year, and this year was no exception," he said. Although initial claims rose last week, the four-week moving average, which aims to smooth volatility in the data, still continued to drop. The Labor Department said the four-week moving average fell by 7,750 to 473,750 from the previous week's revised average of 481,500. That is the lowest figure since September 27, 2008. Michelle Meyer, an economist at Barclays Capital, said in an interview Wednesday that despite the predicted increase in claims, she also expected the four-week moving average to continue to decline in a positive sign for the labor market. "You are still seeing an improving trend," she said. "You are still experiencing an overall downturn in jobless claims." In the Labor Department's Thursday report, the number of continuing claims--those drawn by workers for more than one week in the week ended Nov. 28 --fell by 303,000 to 5,157,000 from the preceding week's revised level of 5,460,000. The unemployment rate for workers with unemployment insurance for the week ended Nov. 28 decreased to 3.9%, a 0.2 percentage point decline from the prior week's unrevised rate of 4.1%. The largest increase in initial claims for the week ended Nov. 28 was in Wisconsin due to layoffs in the construction, service and manufacturing sectors. The largest decrease in initial claims occurred in California.

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