The US trade deficit narrowed more than expected in November as the price of crude oil eased, exports grew and the deficit with China declined for the first time in seven months.
The US deficit in international trade of goods and services fell 5.8% to $64.21 billion from a revised record high of $68.13 billion in October, the Commerce Department said Thursday. October’s shortfall was previously estimated at $68.89 billion.
The decline in the deficit was even sharper than Wall Street had predicted. A Dow Jones Newswires and CNBC survey of 19 economists had forecast a deficit of $66.50 billion.
Rising oil prices, plus strong demand, had kept the US trade deficit hovering around record levels throughout the fall, despite strong export growth. In November, cheaper crude, coupled with weaker demand for energy products overall, reversed some of the surprising expansion in the trade gap recorded in August and September. Meanwhile, exports of big-ticket Boeing airplanes and other capital goods boosted exports during November.
Overall imports dropped 1.1% to $173.51 billion, Commerce said.
Purchases of industrial materials from overseas fell $1.24 billion, pushed lower by fuel oil, natural gas and chemical fertilizers. Consumer goods imports - including pharmaceutical preparations, toys and electronics - fell $1.07 billion.
US imports of capital goods, like aircraft and agricultural machinery, fell $38 million, while imports of autos and parts rose $113 million.
The average price of a barrel of crude slid $4.13 to $52.16. This offset a rise in the volume of crude oil imports to 314 million barrels, bringing the value of crude imports to $16.40 billion in November.
However, demand for imported energy products overall fell in November, bringing the nation’s bill for total energy-related petroleum products to $22.71 billion.
Exports advanced 1.8% to $109.31 billion in November from $107.38 billion in October.
Exports of capital goods including civilian aircraft, railway equipment, and excavating machinery rose by $1.15 billion, and foreign sales of autos and parts rose $171 million. Exports of consumer goods like pharmaceuticals, electronic and clothes rose $583 million and exports of industrial materials like chemicals were up $406 million. Only exports of foods and beverages declined in November, by $153 million.
The strong exports helped pushed deficits with major trading partners, mostly lower in November.
The shortfall with China decreased for the first time in seven months to $18.49 billion from a record $20.52 billion in October. The deficit with Japan narrowed to $7.28 billion from $7.36 billion. The trade gap with the euro area fell to $7.70 billion from $8.79 billion. The deficit with Canada narrowed to $7.53 billion from $8.21 billion. The monthly shortfall with Mexico decreased to $4.57 billion from $4.79 billion. (Dow Jones Newswires)