Thursday, March 11, 2010

U.S. Economy: Trade Deficit Unexpectedly Shrinks

(Business Week – Shobhana Chandra, Bloomberg)

The trade deficit in the U.S. unexpectedly narrowed in January as imports fell for the first time in five months, indicating demand is cooling following the fastest pace of growth in six years. The gap shrank 6.6% to $37.3 billion from $39.9 billion in December as refineries imported the fewest barrels of crude oil in a decade, Commerce Department figures showed today in Washington. Exports decreased for the first time in nine months, on fewer shipments of aircraft and autos.

“The somewhat disappointing trade data seem likely to prove a brief pause in a generally improving trend,” said David Resler, chief economist at Nomura Securities International Inc. in New York. “Trade flows are notoriously volatile from month- to-month, but declines in both exports and imports are hardly signs of economic vitality.” Read more here.