Trade Deficit Narrows in November to $9.7 Billion

The U.S. merchandise trade deficit narrowed in November to $9.7 billion as America’s foreign oil bill fell 13%, the government said today.

The Commerce Department said the 11.7% drop resulted from declines in both imports and exports, which had reached record highs in October.

Imports fell 5.8%, to $43.3 billion, while exports dropped 4%, to $33.6 billion. The deficit is the difference between the two.

Oil imports declined to $6.3 billion in November from $7.23 billion a month earlier. Volume declined to 7.14 million barrels a day from 8.03 million in October, although prices rose slightly, from $29.04 to $29.44 in November.

Virtually all other import categories declined as well, including foreign-made cars.

Car imports, which had soared 39% in October, dropped back 2.1% in November to $4.4 billion.

Except for foods, most export categories also posted declines.

Excluding oil products, the deficit totaled $4.3 billion, down from a $5-billion non-oil gap a month earlier.

The overall deficit was slightly higher than the $9.5 billion forecast by many economists.

Strong exports have been one of the few sources of strength recently in the nation’s economy, which the Bush Administration and most economists agree has lapsed into a recession.

The Administration had hoped a weaker dollar would continue to prop up exports since it lowers the cost of U.S. goods overseas and thus makes them more attractive.

At the same time, imports were expected to decline both because the weaker dollar makes goods produced overseas more expensive to Americans and because of the recessionary economy.