January trade deficit shrinks unexpectedly
3/12/2010WASHINGTON - The U.S. trade deficit unexpectedly shrank in January, reflecting a big drop in imports of oil and foreign cars. American exports also fell, a potential blow to hopes that the economic recovery will be aided this year by U.S. sales abroad.
The Commerce Department said the trade deficit declined to $37.3 billion in January, a drop of 6.6 percent from a revised December deficit of $39.9 billion. Economists had been expecting the deficit to widen to $41 billion.
U.S. exports dipped 0.3 percent, reflecting weaker sales of a wide variety of products from civilian aircraft and machinery to agricultural products. But imports dropped by a larger 1.7 percent as both oil and foreign cars saw big declines.
In other economic news, the Labor Department reported that the number of newly laid-off workers filing claims for unemployment benefits slipped last week by 6,000 to a seasonally adjusted 462,000. It was the latest sign that the nation's employment picture is slowly brightening.
Economists believe the 2010 deficit will rise as a rebounding U.S. economy purchases more imports.
However, the hope is that the U.S. recovery will be supported by strength in export sales as American manufacturers benefit from economic rebounds in other nations and a weaker dollar, which makes U.S. goods cheaper in foreign markets.