U.S. Trade Deficit Narrows, as Imports Fall

The United States trade deficit narrowed in October to its lowest point of the year as Americans bought fewer foreign cars and imported less oil. Exports of American-made autos also fell.

The Commerce Department said Friday that the trade deficit shrank 1.6 percent, to $43.5 billion. That’s down from September’s revised figure of $44.2 billion.

American exports slipped 0.8 percent, to $179.2 billion, the first drop after three months of gains. Shipments of industrial supplies, like natural gas, copper and chemicals, fell. Exports of autos and agricultural goods also dropped.

Imports fell 1 percent to $222.6 billion, reflecting a 5 percent decline in oil imports. The average price of imported oil fell for the fifth consecutive month to $98.84, the lowest since March.

A lower deficit can boost economic growth because it typically means foreign nations are buying more American goods. That can lead to more jobs and higher consumer spending, which fuels 70 percent of economic activity.

The deficit shrank every month in the July-September quarter, as exports grew. That contributed almost a half-point to the economy’s 2 percent annual growth rate in the quarter.

Rising consumer demand in the United States could push imports higher, particularly as the holiday shopping season gets under way. Retailers reported that shoppers got off to a robust start over the Thanksgiving holiday weekend. And consumer confidence rose sharply last month, though it is still below levels that are consistent with a healthy economy.

There are also signs hiring is picking up. The number of people seeking unemployment benefits last week fell to its lowest level in nine months. That suggests companies are more confident about the economy’s growth and are laying off fewer workers.

In October, Congress approved free-trade agreements with South Korea, Colombia and Panama, after four years without any new trade deals. The Obama administration says the three deals will boost United States exports by $13 billion a year.

The politically sensitive trade deficit with China narrowed in September after setting an all-time high in August. So far, it is on track to set a record as the highest imbalance the United States has ever recorded with a single country.

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