WASHINGTON – The U.S. trade deficit dropped to the lowest level in nine months in November as exports fell to a nearly four-year low.
The November deficit fell 5 per cent to $42.4 billion, the Commerce Department reported Wednesday.
Exports contracted 1.6 per cent to $182.2 billion, the smallest monthly total since January 2012. Imports were also down, shrinking 1.7 per cent to $224.6 billion. The import declines this year reflect the big drop in global oil prices.
American manufacturers have been hurt by a strong dollar, which makes their products more expensive on overseas markets. They are also contending with economic weakness in some of their biggest export markets including Europe and China.
With just one month left in 2015, the deficit totalled $488 billion for the year, 5 per cent higher than the same period in 2014. A wider trade deficit is a drag on economic growth because it means fewer overseas sales by American producers and larger imports of foreign goods.
The smaller November deficit should give a boost to fourth quarter growth. But economists are forecasting higher deficits going forward and that trade will subtract from growth in 2016.
The deficit with China totalled $31.3 billion in November, down 5.2 per cent from October. Through the first 11 months of 2015, the deficit with China totalled $337.8 billion, putting the country on track to record another annual record trade deficit with China.