Published : Jan. 8, 2014 - 19:49
WASHINGTON (AFP) ― The U.S. trade deficit shrank sharply in November as exports hit a record high for the second straight month, official data showed Tuesday in a positive sign for economic growth.
The foreign trade deficit narrowed 12.9 percent from October, the second month in a row of contraction, to a four-year low of $34.3 billion, the Commerce Department reported.
That was the smallest trade deficit in goods and services with the rest of the world since September 2009.
The deficit was much lower than expected; analysts had forecast $40.4 billion. October’s deficit was $39.3 billion.
November exports rose 0.9 percent to a record $194.9 billion.
Export gains came mainly from aircraft and aircraft engines, chemicals and finished metal shapes.
“Amid concerns of sluggish growth abroad that could consequently drag on a domestic recovery, the rise in exports is an encouraging sign that the global economy is recovering along with the U.S.,” said Michael Soni of BBVA Research.
Imports fell 1.4 percent to $229.1 billion amid a decline in oil prices.
Imports of crude oil, which represent about 10 percent of total imports, dropped 10.8 percent in November to $21.4 billion.
Oil import volume fell 12.2 percent, underscoring that the U.S. economy is growing less dependent on foreign energy as the nation ramps up oil production.
The government predicted last month that U.S. oil output will continue to surge toward the 1970 record high over the next two years, riding the gains in production from “tight” oil ― such as shale reserves tapped by hydraulic fracturing, or fracking.
Petroleum exports, crude and products, hit a record $13.3 billion in November, while imports fell to $28.5 billion, the lowest level since November 2010. The petroleum deficit of $15.2 billion was the lowest since May 2009.
“Record purchases of foreign autos and capital goods point to a strengthening consumer, but the real story here is oil,” said Jay Morelock of FTN Financial.
“The energy sector is poised to create jobs and reduce dependence on foreign oil, a potential boost to GDP for years to come.”
Imports of automobiles continued to rise, reaching a record $27.2 billion, the department said.
For the January-November period, the U.S. trade gap was $435.1 billion, down 12.3 percent from the same period in 2012.
“Looking through the monthly changes in trade, which are generally choppy, it appears that export volumes are strengthening into year-end while import volumes are weakening,” said Aaron Smith of Moody’s Analytics.
Analysts said the November trade report suggested estimates for U.S. economic growth in the fourth quarter need to be revised higher.
“Some of the improvement represented prices rather than volumes, but the real (inflation-adjusted) data were also positive,” Jim O’Sullivan of HFE Economics said in a research note.
“The data look consistent with net exports adding at least a point to Q4 real GDP growth,” he said.
U.S. gross domestic product growth was at a robust 4.1 percent annual pace in the third quarter.
The upbeat trade report came as the Federal Reserve reduces its massive monetary stimulus program to $75 billion a month in asset purchases in January after seeing the economy’s recovery from recession gaining traction.
Exports to China struck a record high $13.2 billion in November. The huge, politically sensitive trade gap with the second-largest economy narrowed to $26.9 billion from $28.9 billion in October.
Critics say that Beijing keeps its yuan currency undervalued to boost exports, helping to maintain the largest two-way trade surplus with the U.S.
In the first 11 months of the year, the China gap stood at $293.9 billion, potentially on trend to top the record of $315.1 billion in 2012.
With the 28-nation European Union, the largest U.S. trade partner, the gap narrowed 30 percent in November, to $10.1 billion.