Updated on
Summary The trade deficit narrowed to $41.5 billion in September, the Commerce Department said Thursday.
The US trade deficit declined to the lowest level in almost two years as exports rose to a record high, a gain that is not expected to last given the global economic slowdown.That is 5.1 percent below the August deficit and the smallest imbalance since December 2010.Exports climbed 3.1 percent to an all-time high of $187 billion, reflecting stronger sales of commercial aircraft, heavy machinery and farm goods. Imports were also up, rising 1.5 percent to $228.5 billion, reflecting a jump in shipments of consumer goods from cell phones to clothing and toys.So far this year, the U.S. deficit is running at an annual rate of $554 billion, slightly below last years $559.9 billion imbalance, which had been 13.2 percent higher than 2010.The U.S. deficit with China increased to $29.1 billion in September and is running 6.8 percent ahead of last years record pace. Americas deficit with China last year was the highest imbalance ever recorded with a single country.Exports to the 27-nation European Union totaled $21.3 billion in September, unchanged from the August export level. Exports to Latin America showed a 4.2 percent increase in September, although exports to Brazil, South Americas biggest economy, fell 1.8 percent. Exports to China, the worlds second-largest economy and a fast-growing market for the United States, rose 2.1 percent in September.A wider trade deficit acts as a drag on growth. It typically means the U.S. is earning less on overseas sales of American-produced goods while spending more on foreign products.In the July-September quarter, the economy grew at an annual rate of 2 percent, a slight pickup from the 1.3 percent expansion turned in from April through June. But trade trimmed the third quarter performance by 0.18 percentage point, reflecting a drop in exports.Most economists believe that the economy will continue with weak growth of around 2 percent for the final three months of this year. Growth at that level is not fast enough to translate into a significant improvement in the trade deficit.
