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US trade deficit narrows slightly; exports rise
[WASHINGTON] The US trade deficit narrowed less than expected in October as lower crude oil prices failed to offset a jump in imports, while an increase in exports suggested the economy was weathering faltering global demand.
The Commerce Department said on Friday the trade gap fell 0.4 per cent to US$43.4 billion. September's shortfall on the trade balance was revised up to US$43.6 billion from a previously reported US$43.03 billion.
Economists polled by Reuters had forecast the trade deficit falling to US$41.4 billion. When adjusted for inflation, the deficit was little changed at US$50.84 billion, suggesting trade would be a drag on fourth-quarter gross domestic product.
Trade was one of the contributors to the third quarter's brisk 3.9 per cent annualized growth pace.
Imports increased 0.9 per cent in October to a record high of US$241 billion. Petroleum imports were the lowest since November of 2009. A domestic energy boom has enabled the United States to reduce its dependence on foreign oil, easing pressure on the trade deficit.
Declining oil prices, which fell in October to their lowest level since February of 2011, are also helping to curb the import bill.
While a slowing global economy is dampening crude oil prices, there is little sign that US exports are taking strain.
Exports increased 1.2 per cent to US$197.5 billion in October.
Exports to the European Union increased 8.5 per cent, while China saw a 36 per cent jump in the value of goods it imported from the United States. Exports to Japan rose 4.0 per cent, while those to Canada and Mexico - the main US trading partners - reached record highs.
Sustained dollar strength, however, is expected to undercut export growth in the months ahead.
Imports from China hit an all-time high, leaving the politically sensitive trade gap at US$32.6 billion.