US trade deficit shrinks to 9-month low

The US trade deficit shrank in November to a nine-month low as a sharp drop in imports outpaced a decline in exports, the Commerce Department said Wednesday.

AFP| Updated: Jan 06, 2016, 20:44 PM IST

Washington: The US trade deficit shrank in November to a nine-month low as a sharp drop in imports outpaced a decline in exports, the Commerce Department said Wednesday.

The chronically deficit US trade balance with the rest of the world fell 5.0 percent in the month to $42.4 billion, the lowest gap since February, as growth in the global economy slowed and the strong dollar weighed on exports.

The unexpected decline in the trade deficit, from a revised $44.6 billion in October, was seen as a blip in the US trade picture.

"A temporary drop in the deficit; expect a December rebound," said Ian Shepherdson, chief economist at Pantheon Economics, in a client note.

"The underlying trends in both exports and imports are now falling, thanks to the combination of dollar strength and sluggish domestic capex (capital expenditure)," he said. "We don`t see these trends changing anytime soon."

Imports sank 1.7 percent to $224.6 billion in November largely on a steep decline in consumer goods. Overall goods imports fell to $183.5 billion, the lowest level in nearly five years.

Exports of goods and services fell 0.9 percent to $182.2 billion, more than a four-year low.

Bucking a months-long trend, the deficit in petroleum products jumped in November, by 20 percent to $5.24 billion.

By region, unadjusted goods data showed the gap with China shrank 5.1 percent to $31.3 billion while that with the 28-nation European Union was steady at $15.7 billion.

With Canada, the second largest US trading partner, the goods trade gap was $345 million, following a small surplus in October.