The US trade deficit narrowed more than expected in September, despite near record imports from China, as a weak US dollar helped American exports grow for the third consecutive month.
The monthly trade gap totaled $44 billion, down from a revised estimate of $46.5 billion in August.
Wall Street analysts had expected the deficit to narrow to about $45.5 billion.
US exports rose a bare 0.3% to $154.1 billion. But that still was the highest since the depths of the financial crisis in August 2008, and included record services exports of $46.5 billion.
US President Barack Obama, who is on a trip to Asia intended partly to boost US trade, has set a goal of doubling exports over the next five years to create millions of jobs.
With Mr Obama and Congress under pressure to cut spending and the huge budget deficit, many experts see trade as one area where the federal government can help foster economic growth.
US imports, in a sign consumers and businesses are cutting back on their purchases, fell 1% in September to $198.1 billion.
But imports of advanced technology products set a record, as did the US trade deficit in that key trade sector, raising concern the United States is losing its edge in industries such as computers and telecommunications, nuclear energy, life sciences and biotechnology.
US imports from China totaled $35.0 billion, just barely below a record set in August, while U.S exports to the country declined fractionally to $7.2 billion.
The resulting $27.8 billion trade deficit with China, by far the largest the United States had with any trade partner, could revive chances for the Senate to vote on legislation punishing some Chinese imports for Beijing's currency practices.
The House of Representatives approved that bill in September in the belief that China deliberately undervalues its currency to give Chinese companies an unfair trade advantage.
In the first 9 months of the year, the trade deficit with China has swelled to $201.2 billion, compared to $165.9 billion in the same period in 2009, reviving concerns that huge global imbalances blamed for the global financial crisis are reemerging.
The US trade deficit was $379.1 billion in the first nine months of this year, compared to $270.2 billion in the same period in 2009, putting it on a path to exceed $500 billion in 2010.
US jobless claims dropped sharply last week giving hope that the struggling labour market was turning a corner.
Initial claims stood at 435,000, a decrease of 24,000 from the previous week's revised figure of 459,000, ending an upward climb that had raised concerns about prolonged stagnation in the troubled jobs market.
That was well below the 450,000 level expected by economists.
The four-week moving average, a less volatile figure that offers a better gauge of the economy's health, stood at 446,500, down 10,000 from the previous week's revised average of 456,500, the lowest since the week that ended on 13 September, 2008, before the collapse of Lehman Brothers.
