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With oil imports falling, U.S. trade deficit sinks to 4-year low

January 07, 2014|By Don Lee
  • Rising U.S. oil production, such as on a field near Helena, Texas, has helped lower the trade deficit.
Rising U.S. oil production, such as on a field near Helena, Texas, has helped… (Jerry Lara / Associated…)

WASHINGTON — U.S. exports rose to a record high in November, helping to shrink the nation's trade deficit to the lowest in four years.

The surprisingly positive trade report Tuesday adds to the upbeat outlook for the economy. With net exports stronger than expected, analysts revised higher their economic growth forecast for the fourth quarter, saying it will likely come in at a solid annual rate of about 3%.

The Commerce Department said the U.S. trade deficit in goods and services with the rest of the world totaled $34.3 billion in November. That was the lowest since fall 2009 and a steep drop from a trade gap of $39.3 billion in October, seasonally adjusted. 

U.S. exports of goods and services reached $194.9 billion in November, up 1% from $193.1 billion in October.

American imports saw a sharper change but in the other direction, falling to $229.1 billion in November from $232.5 billion in the prior month. The 1.5% decline was mostly because of a big drop in the quantity and value of purchased crude oil.

In all, imports of petroleum goods fell 11% in November from the prior month, to $28.5 billion, seasonally adjusted. Meanwhile, U.S. exports of energy continued to edge higher, with petroleum shipments rising 5.5% in November to $13.3 billion.

On an inflation-adjusted basis, the U.S. trade deficit in petroleum goods in November was the lowest since late 1996, Commerce data show.

Exports in November also were lifted by a modest gain in automotive products and capital goods such as aircraft and industrial machines. American shipments of foods and consumer goods were down slightly over the month.

For the first 11 months of last year, the U.S. trade deficit for all goods and services totaled $435.1 billion. That was down 12% from the same period a year earlier. Total U.S. exports were up 3% to $2.08 trillion, while imports were essentially flat at $2.51 trillion. 

With the U.S. becoming more energy independent, the American trade balance with oil-producing countries has improved sharply over the last year.

The U.S. merchandise trade deficit with Saudi Arabia and other OPEC nations totaled $64.1 billion in the first 11 months of last year — a decline from $95.7 billion in the same period a year earlier. 

At the same time, the American trade gap in goods with other major trading partners widened slightly. The U.S. trade deficit with Europe in the January-November period of last year rose 4% to $121.4 billion, and the gap with China was $293.9 billion, up 1% from a year earlier.

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