Surprise fall in US trade gap in January
By Martin Crutsinger |
March 13, 2010, Saturday
|
Print Edition
Print Edition
THE United States trade deficit unexpectedly shrank in January, reflecting a big drop in imports of oil and foreign cars. American exports also fell, a potential blow to hopes that the economic recovery will be aided this year by US sales abroad.
The US Commerce Department said on Thursday that the trade gap fell to US$37.3 billion in January, a drop of 6.6 percent from a revised December deficit of US$39.9 billion. Economists had been expected the deficit to widen to US$41 billion.
US exports dipped 0.3 percent, reflecting weaker sales of a wide variety of products from civilian aircraft and machinery to agricultural products. But imports dropped by a larger 1.7 percent as both oil and foreign cars saw big declines.
In other economic news, the US Labor Department reported that the number of newly laid-off Americans filing claims for unemployment benefits slipped last week by 6,000 to a seasonally adjusted 462,000. It was the latest sign that the nation's employment picture is slowly brightening.
If the trade deficit held at January's level for an entire year, it would give the country an imbalance of US$447.5 billion in 2010, up from a 2009 deficit of US$378.6 billion, which had been the smallest trade gap in eight years. That improvement reflected a drop in global oil prices and a deep recession, which cut into demand for imported goods.
Economists believe the 2010 deficit will rise as a rebounding US economy purchases more imports. However, the hope is that the US recovery will be supported by strength in export sales as American manufacturers benefit from economic rebounds in other nations and a weaker dollar, which makes US goods cheaper in foreign markets.
That expectation, however, has been clouded somewhat by a rise since December in the dollar's value against the euro, the common currency of 16 European Union countries. But economists believe that gain will not be large enough or last long enough to derail America's export prospects.
The trade report showed the US deficit with China edged up 0.9 percent in January to US$18.3 billion even though imports from China fell to the lowest level since June.
The deficit with the EU plunged 56.3 percent in January to US$2.8 billion, the lowest since May. The big drop reflected a huge drop in imports of European autos.
The US Commerce Department said on Thursday that the trade gap fell to US$37.3 billion in January, a drop of 6.6 percent from a revised December deficit of US$39.9 billion. Economists had been expected the deficit to widen to US$41 billion.
US exports dipped 0.3 percent, reflecting weaker sales of a wide variety of products from civilian aircraft and machinery to agricultural products. But imports dropped by a larger 1.7 percent as both oil and foreign cars saw big declines.
In other economic news, the US Labor Department reported that the number of newly laid-off Americans filing claims for unemployment benefits slipped last week by 6,000 to a seasonally adjusted 462,000. It was the latest sign that the nation's employment picture is slowly brightening.
If the trade deficit held at January's level for an entire year, it would give the country an imbalance of US$447.5 billion in 2010, up from a 2009 deficit of US$378.6 billion, which had been the smallest trade gap in eight years. That improvement reflected a drop in global oil prices and a deep recession, which cut into demand for imported goods.
Economists believe the 2010 deficit will rise as a rebounding US economy purchases more imports. However, the hope is that the US recovery will be supported by strength in export sales as American manufacturers benefit from economic rebounds in other nations and a weaker dollar, which makes US goods cheaper in foreign markets.
That expectation, however, has been clouded somewhat by a rise since December in the dollar's value against the euro, the common currency of 16 European Union countries. But economists believe that gain will not be large enough or last long enough to derail America's export prospects.
The trade report showed the US deficit with China edged up 0.9 percent in January to US$18.3 billion even though imports from China fell to the lowest level since June.
The deficit with the EU plunged 56.3 percent in January to US$2.8 billion, the lowest since May. The big drop reflected a huge drop in imports of European autos.
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