Washington, DC, December 12, 2006--The nation's trade deficit narrowed 8.4% in October to $58.9 billion from $64.3 billion in September, the Commerce Department said.
This is the smallest trade gap since August 2005. The one-month improvement in the deficit is the biggest since December 2001
The narrowing of the deficit was much larger than expected. Analysts had expected the deficit to narrow to $63.1 billion.
The improving deficit will be a boost to economic growth in the fourth quarter.
For the first ten months of the year, the trade gap is $643.4 billion. This is still above the record pace of 2005. In October, exports rose slightly to a new record level while imports declined sharply.
Exports rose 0.2% to $123.6 billion in October. Imports fell 2.7% to $182.5 billion. This is the largest monthly decline in imports since December 2001.
Imports of goods alone fell 3.4% to $153.6 billion. The largest drop came from imports of industrial supplies, principally crude oil. The U.S. imported a record amount of food and consumer goods in October.
Exports of goods alone slipped 0.2% to $88.5 billion. However, the U.S. exported a record amount of capital goods and consumer goods in the month. Exports of civilian aircraft declined in October.
The petroleum deficit narrowed 17.1% in October to $18.76 billion. This is the lowest level since June 2005.
The value of U.S. crude oil imports fell to $17.29 billion in October from $19.79 billion in September as the price of a barrel of oil fell to $55.47 from $62.52 in the previous month. The quantity of crude imports fell to 311.8 million barrels.
Despite the improvement in the overall trade gap, the U.S. trade deficit with China widened to a record $24.4 billion in October from $20.4 billion in the same month last year and $22.3 billion in September. The trade gap with China rose to $190.6 billion in the first ten months of the year, up from $166.8 billion in the same period last year.
