The US trade deficit narrowed sharply in November amid declines in imports of cellphones and petroleum products.
The Commerce Department said on Wednesday the trade deficit dropped 11.5 per cent to $49.3 billion. The trade gap had increased for five straight months. Data for October was revised to show the deficit rising to $55.7 billion instead of the previously reported $55.5 billion.
Economists polled by Reuters had forecast the trade deficit would fall to $54.0 billion in November. The release of the report was delayed by a recently ended five-week partial shutdown of the federal government.
The politically sensitive goods trade deficit with China fell to $37.9 in November from $43.1 billion in October. The overall trade deficit has remained elevated despite the Trump administration's “America First” policies, which have led Washington to impose tariffs on a range of imported goods from China, sparking a trade war with Beijing.
The United States has also slapped duties on imported steel, aluminium, solar panels and washing machines.
When adjusted for inflation, the goods trade deficit decreased $7.5 billion to $80.8 billion in November. The drop in the so-called real trade deficit led some economists to believe that trade probably made a small contribution to gross domestic product in the fourth quarter.
The release of the fourth-quarter GDP report has been delayed by the government shutdown, which ended on January 25 after President Donald Trump and Congress agreed to temporary government funding, without money for his US-Mexico border wall.
Trade subtracted 1.99 percentage points from GDP growth in the July-September quarter. Growth estimates for the fourth quarter are around a 2.5 per cent annualized rate. The economy grew at a 3.4 per cent pace in the third quarter.
In November, imports of goods and services tumbled 2.9 per cent to $259.2 billion. Consumer goods imports decreased $4.3 billion, weighed down by a $2.3 billion drop in imports of cellphones and other household goods. Imports of petroleum products fell $1.4 billion, with crude oil imports dropping $0.7 billion.
Exports of goods and services fell 0.6 per cent to $209.9 billion. Exports of consumer goods decreased $0.9 billion and those of petroleum products fell $0.6 billion. Exports of capital goods, however, increased $1.4 billion, lifted by a $1.0 per cent rise in civilian aircraft shipments.