Trade Deficit Lowest in Nearly Six Years

Washington, DC, Feb. 11, 2009--The U.S. trade deficit narrowed less than anticipated in December to the smallest in almost six years as the recession pushed oil prices and consumer spending lower, reducing imports.

The gap between imports and exports shrank 4 percent to $39.9 billion, the lowest since February 2003, from a revised $41.6 billion deficit in November that was wider than previously estimated, the Commerce Department said today in Washington. Imports fell to the lowest since 2005.

“The boost from trade has vanished,” Jonathan Basile, an economist at Credit Suisse Holdings in New York, said before the report. “U.S. demand is falling even faster than demand from our trading partners. There’s weakness across-the-board in imports, and the global recession will be a damper on exports.”

The trade gap was estimated to narrow to $35.7 billion, from an initially reported $40.4 billion in November, according to the median forecast in a Bloomberg News survey of 70 economists. Deficit projections ranged from $31 billion to $45 billion.

For all of 2008, the U.S. trade deficit narrowed to $677.1 billion from $700.3 billion in the previous year.

Imports in December dropped 5.5 percent to $173.7 billion, the lowest since September 2005, from $183.9 billion the prior month as U.S. consumers bought fewer foreign-made cars and trucks and oil prices fell. Purchases of clothing, furniture and household appliances from outside the U.S. also declined, further reflecting shrinking demand for foreign-made goods.

Exports in December fell 6 percent to $133.8 billion.

After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit widened to $43.3 billion from $40.1 billion.

The trade gap with China narrowed to $19.9 billion, while the trade deficit with Canada shrank to $2.8 billion.