U.S. trade deficit narrows in November as oil imports fall to lowest level in 28 months
Friday, January 18th 2002, 12:00 am
By: News On 6
WASHINGTON (AP) _ The U.S. trade deficit narrowed to $27.9 billion in November as oil imports fell to the lowest level in more than two years, the government said Friday.
The Commerce Department reported that the deficit in goods and services narrowed by 4.9 percent from an October imbalance of $29.3 billion.
The gap in goods alone narrowed by 3.1 percent to $33.97 billion, the smallest goods deficit since January 2000. Much of the improvement in that area came from a dramatic 17.4 percent plunge in oil imports, which fell to $6.5 billion in November, the lowest level since July 1999.
Through the first 11 months of 2001, the country's trade deficit was running at an annual rate of $349 billion, down from the all-time high of $375.7 billion hit in 2000.
The Bush administration had hoped to reduce the massive trade deficit by boosting U.S. exports through new trade liberalization agreements around the world.
However, the improvement this year is the result of the country's first recession in a decade. That has cut into demand for imports, which are down 5.4 percent from a year ago.
Exports, because economic weakness in the United States has spread overseas, were down by 5 percent through the first 11 months of 2001 compared to the same period in 2000.
For November, the deficits with both China and Japan, the countries with which the United States has its biggest imbalances, showed improvements.
The deficit with China narrowed by 21.1 percent to $7.2 billion, the lowest level since June. That reflected a drop-off in shipments of toys, which had soared in previous months as retailers stocked up for Christmas. The individual country figures, unlike the overall numbers, are not adjusted for seasonal variations.
The deficit with Japan fell 15.6 percent to $5.87 billion; a big drop in imports outpaced a fall in U.S. exports to Japan, which declined to the lowest level in more than two years.
Japan's economy, plagued by weakness for more than a decade, has fallen into another recession. U.S. Treasury Secretary Paul O'Neill is scheduled to meet with government officials in Tokyo next week to urge them to do more to stimulate an economic rebound in the world's second- largest economy.
The overall U.S. deficit of $27.9 billion was the lowest since a $19 billion deficit in September, when the figure was skewed by the way the government accounted for foreign insurance payments as a result of the Sept. 11 terrorist attacks.
Total U.S. exports of goods and services were up 0.7 percent in November to $78.2 billion, reflecting gains in sales of American farm products, industrial machinery and laboratory testing equipment. Those gains helped offset declines in exports of autos, consumer goods including household appliances and civilian aircraft.
Imports of goods and services fell by 0.8 percent in November to $106.1 billion, with the big drop in oil shipments and declines in imports of computers, toys and pharmaceuticals. Imports of autos, televisions and diamonds were up in November.
The U.S. deficit with the 15-nation European Union narrowed by 15.8 percent in November to $5.86 billion and the imbalance with Mexico was down 3.5 percent to $2.5 billion.
However, the deficit with Canada, America's other partner in the North American Free Trade Agreement, rose by 0.4 percent to $3.82 billion.