The US trade deficit fell in November to its lowest level in four years, an encouraging sign for economic growth.
Gains in energy production and stronger sales of American-made airplanes, autos and machinery lifted exports to an all-time high.
The trade gap dropped 12.9 per cent in November to USD 34.3 billion, the Commerce Department said today. That's the smallest monthly trade deficit since October 2009.
Exports rose 0.9 per cent to a record USD 194.9 billion, aided by a 5.6 per cent rise in petroleum exports. Imports dropped 1.4 per cent to USD 229.1 billion. A decrease in demand for foreign oil offset a record level of imported autos.
Through 11 months of 2013, the trade deficit is 12.3 per cent lower than the same period in 2012. Exports have strengthened while imports are slightly lower.
A smaller trade deficit can boost economic growth. It typically shows that US companies are earning more from sales overseas while US consumers are buying fewer products from foreign companies.
A domestic energy boom has boosted exports and lessened America's dependence on foreign oil. US petroleum exports were up 10.8 per cent through the first 11 months of 2013 compared with the same period in 2012. At the same time, petroleum imports are down 11.5 per cent in that stretch.
The drop in oil imports has been helped by lower global prices. After peaking at USD 102 per barrel in September, the average price of a barrel of imported crude oil has been falling. It averaged USD 94.69 a barrel in November. Analysts are predicting the price of imported oil will decline further, noting ample supplies and a strengthening dollar.
The US deficit with China fell 6.7 per cent in November from October to USD 26.9 billion. US exports to China hit a record. The US deficit with China, the largest with any country, is still on track to set another record this year.
The deficit with the European Union dropped 29.4 per cent in November to USD 10.1 billion. That reflected a big drop in imports from that region, which offset a small dip in US sales to Europe.
The overall economy grew at an annual rate of 4.1 per cent in the July-September quarter. Much of that strength reflected a buildup in business stockpiles. Economists believe inventory building slowed in the October-December quarter, which could dampen growth.
Still, other data have been encouraging. The rise in exports has lifted factory output. And a stronger job market has made Americans more confident in the economy and led to more spending. Those factors could offset some of the drag from lower inventory growth.
Many analysts are forecasting economic growth in the fourth quarter at an annual rate of around 2.5 per cent. And they expect growth will accelerate in 2014, helped by further gains in exports, more job growth and less drag from the federal government.
