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WASHINGTON: The US trade deficit narrowed unexpectedly in January as imports and exports declined and overall volume fell for the first time in five months, the government reported Thursday.
The Commerce Department said the trade deficit shrank to a seasonally adjusted US$37.3 billion, from a downwardly revised US$39.9 billion in December.
The figures surprised most analysts who had expected the trade shortfall would increase to US$41.0 billion.
"The recent roller-coaster ride in trade news continues with this month's release, though the overall trend of slowly growing trade volume continues," said Christopher Cornell at Moody's Economy.com.
Imports dropped 1.7 per cent to US$180.0 billion, including the lowest level of oil imports in more than a decade, while exports slipped 0.3 per cent to US$142.7 billion.
Analysts noted the slowing trade flows had come after surges in previous months.
Natixis analyst Inna Mufteeva said the data clouded the outlook for the country's fragile recovery from severe recession that began in December 2007.
"Improvement in US consumption did not impress much the importers as consumer goods imports dropped 2.3 per cent in January," she said.
Consumer spending accounts for two-thirds of US economic activity and is considered key to sustainable growth in a budding recovery that so far has been propped up by government spending.
US trade volume with the rest of the world declined for the first time since August, by 1.1 per cent from December, the data showed.
"We are inclined to view it as a seasonal adjustment or weather story, or both, and we expect trade flows to rebound strongly in February," said Ian Shepherdson at High Frequency Economics.
The lower January deficit was partly due to crude oil imports that slumped to their lowest level since February 1999, at 245 million barrels.
The gap in petroleum products, however, again weighed heavily on the trade balance, though it narrowed to US$22.7 billion in January from US$23.6 billion the previous month.
The average price of imported oil jumped to US$73.89, its highest peak since October 2008.
In unadjusted data, the trade deficit with Canada, the largest US trading partner, grew to US$3.9 billion, marking the biggest gap since October 2008.
The deficit with Mexico narrowed to US$4.6 billion from US$5.2 billion.
The politically sensitive trade deficit with China edged up to US$18.3 billion from US$18.1 billion in December.
"Do not expect the situation to last," warned Moody's Cornell, after China reported February trade data Wednesday showing exports soared for the third straight month and at their fastest pace in three years.
"These will be reflected in the US trade data for February, set for release next month," he said.
The country's massive trade gap with China, by far its largest with any trading partner, is an underlying source of friction in bilateral trade ties.
Critics accuse Beijing of keeping its yuan currency undervalued to maintain a trade advantage.
President Barack Obama Thursday called on China to embrace a "market-oriented" exchange rate for its yuan currency, according to an advance copy of a major speech on trade he was due to deliver later in the day.
"China moving to a more market-oriented exchange rate would make an essential contribution" to efforts to rebalance imports and exports in the global economy, he said.
The US trade deficit narrowed with other major trading partners: to US$3.3 billion with Japan and US$2.8 billion with the European Union.
- AFP/yb
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