The U.S. trade defict narrowed more than expected in September, despite near record imports from China, as a weak U.S. dollar helped American exports grow for the third consecutive month, a U.S. government report showed.
The monthly trade gap totaled $44.0 billion, down from a revised estimate of $46.5 billion in August. Wall Street analysts had expected the deficit to narrow to about $45.5 billion.
U.S. exports rose a bare 0.3 percent to $154.1 billion. But that still was the highest since the depths of the financial crisis in August 2008, and included record services exports of $46.5 billion.
President Barack Obama, who is on a trip to Asia intended partly to boost U.S. trade, has set a goal of doubling exports over the next five years to create millions of jobs.
With Obama and Congress under pressure to cut spending and the huge budget deficit, many experts see trade as one area where the federal government can help foster economic growth.
U.S. imports, in a sign consumers and businesses are cutting back on their purchases, fell 1.0 percent in September to $198.1 billion.
But imports of advanced technology products set a record, as did the U.S. trade deficit in that key trade sector, raising concern the United States is losing its edge in industries such as computers and telecommunications, nuclear energy, life sciences and biotechnology.
U.S imports from China totaled $35.0 billion, just barely below a record set in August, while U.S exports to the country declined fractionally to $7.2 billion.
The resulting $27.8 billion trade deficit with China, by far the largest the United States had with any trade partner, could revive chances for the Senate to vote on legislation punishing some Chinese imports for Beijing’s currency practices.
The House of Representatives approved that bill in September in the belief that China deliberately undervalues its currency to give Chinese companies an unfair trade advantage.
Many observers believe the bill could fall by the wayside following the Nov. 2 congressional election in which Democrats lost control of the House. But some think its fate depends on whether Obama can make progress with the Chinese on the issue at this week’s Group of 20 summit in Seoul.
In the first 9 months of the year, the trade deficit with China has swelled to $201.2 billion, compared to $165.9 billion in the same period in 2009, reviving concerns that huge global imbalances blamed for the global financial crisis are reemerging.
The U.S. trade deficit was $379.1 billion in the first nine months of this year, compared to $270.2 billion in the same period in 2009, putting it on a path to exceed $500 billion in 2010. (Reuters)