America’s trade deficit shrank in November as a decline in imports exceeded a drop in the value of shipments abroad.
The gap narrowed 5% to $42.4 billion from a revised $44.6 billion in October that was wider than previously estimated, the Commerce Department reported Wednesday. The median forecast in a Bloomberg survey of economists called for a November deficit of $44 billion.
Imported merchandise, primarily consumer goods, decreased to the lowest level since February 2011 and is partly explained by the limited progress companies made getting inventories more in line with demand. At the same time, persistent dollar strength and weakness in global markets continued to reduce overseas sales, indicating trade will do little to spur the US economy.
“There are two things happening: one is the strong dollar, which is making US exports less competitive while making US imports more inexpensive all else equal, and the global economy is softening,” Joseph LaVorgna, chief US economist at Deutsche Bank Securities Inc in New York, said before the report. “That’s a double whammy in the trade calculus.”
After eliminating the effects of price fluctuations, which generates the numbers used to calculate gross domestic product, the trade deficit narrowed to $59.6 billion in November from $61 billion the previous month.
Imports of goods and services decreased 1.7% to $224.6 billion, marking the third consecutive month of declines. Companies shipped in $3 billion less of consumer goods excluding motor vehicles. More than half of the decrease from a month earlier was due to a drop in the value of mobile phone imports.
Falling commodity prices also weighed on the value of imported industrial supplies, including petroleum, chemicals and steel.
The US imported an unadjusted $10.7 billion worth of petroleum-related products. The trade shortfall excluding petroleum shrank to $37 billion in November from $40.1 billion.
The average price of a barrel of imported oil dropped to $39.24 in November, the lowest since February 2009. That helped the US reach a record surplus in goods trade with OPEC nations on an unadjusted basis. Imports from Canada were the lowest since July 2010.
Exports of goods and services fell 0.9% to $182.2 billion in November, the lowest since January 2012.
Depending on global demand, those figures may shift after President Barack Obama last month signed a spending bill that also repealed broad limits against exports of unrefined crude oil that had been in place since 1975, when supply shortages had Americans lining up for hours to fill their gas tanks.
