The trade deficit in the U.S. shrank more than forecast in November as oil imports dropped to the lowest level in three years and exports climbed to a record.
The gap narrowed 12.9% to $34.3 billion, smaller than projected by any economist surveyed by Bloomberg and the least since October 2009, figures from the Commerce Department showed today in Washington. The gain in sales to overseas customers was led by aircraft and chemicals.
Improving economies in Europe and Asia are benefiting companies like Boeing Co., leading to a pickup in manufacturing that is boosting U.S. economic growth. The fuel-driven drop in imports overshadowed record purchases of foreign autos, parts and capital goods that indicate spending by American consumers and businesses is strengthening.
“Part of the improvement has been due to the emergence of the Euro zone from recession,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York and the third-best forecaster of the trade deficit for the past two years, according to data compiled by Bloomberg. “Also, there appears to have been a pickup in demand from Asia at the end of the year. Hopefully that can continue.”
Stocks rose, snapping a three-day retreat, as investors awaited this week’s corporate earnings reports. The Standard & Poor’s 500 Index climbed 0.6% to 1,837.62 at 10:17 a.m. in New York.
The median forecast in a Bloomberg survey of 68 economists projected the deficit would come in at $40 billion. Estimates ranged from $38 billion to $42.8 billion. The Commerce Department revised the October gap down to $39.3 billion from an initially reported $40.6 billion.
Exports increased 0.9% to $194.9 billion, reflecting a $390 million gain in civilian aircraft and a $264 million advance in chemical sales.
Imports dropped 1.4% to $229.1 billion in November. Purchases of crude oil plunged to $28.5 billion, the lowest since November 2010, reflecting both lower prices and volume. The gains in American demand for capital goods were paced by computers and accessories.
The petroleum deficit shrank to $15.2 billion in November, the lowest since May 2009. Excluding oil and adjusting for inflation, the trade deficit was little changed at $41.1 billion in November compared with $41.4 billion the prior month.
“We’ll see imports increase, in particularly non-energy imports, as we see expanding consumer spending in the U.S.,” Gus Faucher, senior economist at PNC Financial Services Group Inc. in Pittsburgh, said before the report.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.