The United States trade deficit fell in November to the lowest level in 11 months as crude oil imports dropped to a two-decade low.
The trade deficit narrowed to $39 billion in November, down 7.7 percent from a revised October deficit of $42.2 billion, the Commerce Department said on Wednesday. United States exports slipped 1 percent to $196.4 billion as sales of commercial airliners fell.
Imports dropped even faster, falling 2.2 percent to $235.4 billion, which was primarily a reflection of foreign oil declines. The volume of crude oil imported in November hit its lowest level since 1994, while the average price dropped to a two-year low.
The United States trade deficit is being helped by falling global oil prices and a boom in American energy production, which has decreased the country’s reliance on imports.
The November deficit was the lowest since a trade gap of $37.4 billion in December 2013. Through the first 11 months of 2014, the deficit is 5.1 percent above the same period in 2013.
Balance of Trade
The deficit is the excess of imports over exports for goods and services. Amounts are rounded, in billions of dollars, seasonally adjusted.
The payroll processor ADP also reported on Wednesday that American businesses increased hiring last month, in the latest sign that the nation’s economy is expanding despite worries about global growth.
Private companies added 241,000 jobs in December, ADP said, compared with 227,000 in November. That suggests that the government report on December job gains, to be released Friday, will also be healthy.The ADP numbers cover only private businesses and can differ from the government’s more complete report, which includes government agencies.
As for the deficit, economists say they believe that it will keep rising in 2015, reflecting an expanding American economy that will import more foreign products than United States producers will sell overseas. American manufacturers are grappling with weakness in major export markets like Europe and Japan, as well as a strengthening dollar, which makes American goods more expensive for foreign consumers.
A rising trade deficit acts as a drag on economic growth, but economists are still forecasting that overall growth in 2015 will be stronger than in 2014.
In November, the politically delicate trade deficit with China dropped 8 percent to $29.9 billion but remained on track to set a high for the year. America’s deficit with China is the largest for any country. It has added to pressure on Congress and the Obama administration to take tougher actions against what critics see as unfair Chinese trade practices.
The widening trade gap with China comes at a time when the administration hopes to finally get Congress to approve the fast-track authority it needs to wrap up a major 12-nation trade agreement with Pacific Rim countries known as the Trans-Pacific Partnership.
The United States deficit with the European Union dropped 7.4 percent to $11.8 billion in November as imports from that region declined more than American exports. An economic slowdown in Europe may damp United States export sales.
Source: nytimes.com
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
