Trade Gap Narrows on Lowest Oil Imports in a Decade
The U.S. trade gap shrank in September to a seven-month low, reflecting declining purchases of foreign fuel as the world’s largest economy continued its drive toward energy independence.
The deficit decreased 15 percent to $40.8 billion from a revised $48 billion in August, the Commerce Department reported Nov. 4 in Washington. The median forecast in a Bloomberg News survey of 67 economists called for a $41 billion shortfall. Demand for petroleum produced abroad fell to the lowest level in more than a decade, while exports climbed.
The narrowing meant trade had little impact on the economy in the third quarter, easing concern that slower global growth and a stronger dollar would cause exports to slump, and growing demand from American consumers would swell imports. The increase in exports, however, was led by volatile categories such as food and artwork, indicating the gain could be reversed in coming months.
“It does suggest that the trade deficit didn’t really widen much at all in the third quarter,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida, whose forecast was among the closest in the Bloomberg survey. While the dollar has stabilized, “we know trade decisions don’t really turn on a dime, so it may take a while before we see the full impact.”
Economists’ forecasts in the Bloomberg survey ranged from deficits of $39 billion to $49 billion.
The reading was in line with the advance report on merchandise trade issued last week, indicating the report will have little influence on gross domestic product when those figures are revised at the end of the month.
Imports decreased 1.8% to $228.7 billion from $233 billion in August. In addition to petroleum, the drop reflected slower sales for civilian aircraft, telecommunications equipment and mobile phones.
Conversely, demand for goods and services from China increased, driving the trade gap with the world’s second-biggest economy to a record $36.3 billion.
The United States imported $13.8 billion worth of petroleum, the least since May 2004, partly reflecting a slump in prices. The trade shortfall excluding petroleum narrowed to $35.2 billion in September from $41.1 billion.
Exports rose 1.6% to $187.9 billion in September. The increase in food shipments was paced by sales of soybeans.
After eliminating the effects of price fluctuations, which generates the numbers used to calculate GDP, the trade deficit narrowed to $57.2 billion in September from $63 billion the previous month.
