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US September trade deficit smallest in seven months
[WASHINGTON] The US trade deficit narrowed sharply in September to its lowest level in seven months as exports rebounded, a tentative sign that the worst of the drag from a stronger dollar may be over.
The Commerce Department said on Wednesday the trade gap fell 15 per cent to US$40.8 billion, the smallest deficit since February. Lower crude oil prices also helped to curb the import bill.
The drop in the trade deficit reversed the widening seen in August, though the prior month's figure was revised slightly down to US$48 billion from the previously reported US$48.3 billion.
Economists had forecast the trade gap shrinking to US$41.1 billion. When adjusted for inflation, the deficit fell to US$57.2 billion in September from US$63.0 billion in the prior month.
Trade had a neutral impact on gross domestic product for the third quarter, which expanded at a 1.5 per cent annual rate. The sharp step-down in growth from the second quarter's brisk 3.9 per cent rate mainly reflected a slow pace of inventory accumulation and ongoing spending cuts by energy firms.
The dollar has gained 16.8 per cent against the currencies of the United States' main trading partners since June 2014, undercutting export growth. Lackluster global demand also has put a damper on exports.
Exports in September rose 1.6 per cent to US$187.9 billion, with exports of services hitting a record high. There were increases in exports of capital goods and automobiles. Exports of industrial supplies and materials, however, were the lowest since October 2010.
Exports to Canada, the European Union and China rose in September. Exports to Japan, however, fell 13.8 per cent to their lowest level since April 2010.
Imports fell 1.8 per cent to US$228.7 billion, the lowest level since February. They had received a boost in August from Apple's new iPhone model.
Imports of industrial supplies and materials fell to the lowest level since August 2009. Petroleum imports were the lowest since May 2004, reflecting increased domestic energy production and lower oil prices.
The price of petroleum averaged US$42.72 per barrel in September, down from US$49.33 in August and US$92.52 in September 2014.
Imports from China hit a record high in September, leaving the politically sensitive US-China trade deficit at an all-time high of US$36.3 billion. That was up 3.8 per cent from August.