US trade deficit shrinks to 9-month low

The US trade deficit shrank in November to a nine-month low as a sharp drop in imports outpaced a decline in exports, the Commerce Department said Wednesday.

The chronically deficit US trade balance with the rest of the world fell 5.0 percent in the month to $42.4 billion, the lowest gap since February, as growth in the global economy slowed and the strong dollar weighed on exports.

The unexpected decline in the trade deficit, from a revised $44.6 billion in October, was seen as a blip in the US trade picture.

"A temporary drop in the deficit; expect a December rebound," said Ian Shepherdson, chief economist at Pantheon Economics, in a client note.

"The underlying trends in both exports and imports are now falling, thanks to the combination of dollar strength and sluggish domestic capex (capital expenditure)," he said. "We don't see these trends changing anytime soon."

Imports sank 1.7 percent to $224.6 billion in November largely on a steep decline in consumer goods. Overall goods imports fell to $183.5 billion, the lowest level in nearly five years.

Exports of goods and services fell 0.9 percent to $182.2 billion, more than a four-year low.

Bucking a months-long trend, the deficit in petroleum products jumped in November, by 20 percent to $5.24 billion.

By region, unadjusted goods data showed the gap with China shrank 5.1 percent to $31.3 billion while that with the 28-nation European Union was steady at $15.7 billion.

With Canada, the second largest US trading partner, the goods trade gap was $345 million, following a small surplus in October.