The US trade deficit narrowed more than expected in October to the smallest gap since January, thanks to a surge in exports underpinned by a weaker dollar, official data showed today.
Separate figures showed that US consumer sentiment in December rose to its highest level since June and was at its third-highest since the start of 2008.
A Thomson Reuters/University of Michigan survey recorded a figure of 74.2, up from 71.6 in November and better than economists had expected.
The Commerce Department reported the trade gap stood at a seasonally adjusted $38.7 billion, down some 13% from a revised $44.6 billion in September. The improvement in the trade balance was much better than the $44.5 billion deficit expected by analysts.
The September gap was revised slightly upwards from a previous estimate of $44 billion.
Exports rose 3.2% and imports declined slightly in the face of slackening demand for industrial and petrol products.
The smaller than expected deficit could boost estimates of US fourth-quarter economic growth because it implies a larger share of US demand is being met by domestic production.
On an annual basis, the trade deficit has widened sharply this year and could surpass $500 billion when final figures for 2010 are available. Last year, in the midst of the global financial crisis which put a squeeze on world trade, the US trade gap narrowed about 46% to $374.9 billion.
Record exports to China and Mexico in October helped push the overall export tally to $158.7 billion, the highest since August 2008. Exports to the EU and Japan also showed growth. Imports fell 0.5% to $197.4 billion, led by drop in imports of industrial supplies and materials and the lowest petrol imports since November 2009.
Despite record exports to China in October, the US trade deficit with that country in the first 10 months of 2010 was $226.8 billion, up 20.3% from the year-earlier period.
