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| Industrial News |
| Less oil imports trim US trade gap |
| 2008-11-20 16:16:24 |
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| THE United States trade deficit in September narrowed more than forecast as a record decline in the cost of foreign crude oil caused fuel imports to tumble.
The gap shrank 4.4 percent to US$56.5 billion, the smallest in almost a year, from US$59.1 billion in August, the Commerce Department said yesterday in Washington. Excluding petroleum, the deficit widened as overseas sales of American-made goods dropped by the most since 2001.
Demand for foreign oil, automobiles and televisions may keep falling as the global credit crunch causes American consumers and businesses to retrench.
A narrowing trade gap is likely to remain one of the few bright spots, even as shrinking economies in Europe and Japan and a rising dollar cause US exports to slump.
"We do expect imports to decline further in the months ahead as the full impact of consumer spending cuts are seen," said Russell Price, a senior economist at Ameriprise Financial Inc in Detroit. "We'll see more evidence of global economic slowdown, so we'll see exports slow and imports slow."
The trade gap was projected to narrow to US$57 billion, according to the median forecast in a Bloomberg News survey of 71 economists. Deficit estimates ranged from US$52.8 billion to US$59 billion.
Imports dropped by a record 5.6 percent to US$211.9 billion. The cost of a barrel of crude oil fell to US$107.58, a decline of US$12.41 from the prior month that was the biggest ever. The number of barrels bought was the fewest in more than five years.
Commodity prices have slumped even more since then, signaling the overall trade balance will continue to improve.
Crude oil increased yesterday, rising from its lowest in 21 months. Oil for December delivery rose as much as 84 cents, or 1.5 percent, to US$57 a barrel on the New York Mercantile Exchange. The contract traded at US$56.81 a barrel as of 12:40pm London time. Purchases of foreign cars and parts dropped to the lowest level since February 2004, and demand for computers, clothing and electronics made abroad also slumped.
Exports dropped 6 percent, the most since September 2001, to US$155.4 billion, led by a US$3.3-billion slump in sales of commercial aircraft.
A drop-off in airplane deliveries by Boeing Co, reflecting the effects of an eight-week strike that was resolved on November 1, contributed to the second consecutive fall in American exports. |
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