Trade Gap Narrows After Port Lockout

The U.S. trade deficit is still expected to widen to a record this year, despite a narrowing in October caused by a West Coast port lockout, as weak world growth continues to curb demand for U.S. exports, analysts said Wednesday.

The Commerce Department said Wednesday that the October trade gap narrowed 5.5% to $35.07 billion, the lowest level since March, after setting a record of $38.09 billion in August.

Ports on the West Coast were closed the last two days of September and the first eight days of October because of a labor dispute between port operators and dockworkers.

The Commerce Department said it could not isolate the effect of the lockout on the monthly trade figures, but analysts said it was a major, if short-lived, factor.

The goods and service trade deficit for the first 10 months of the year was a record $350 billion, compared with $301 billion in the same period last year. A recession that began in March 2001 reduced demand for imports last year, shrinking the deficit from the record $379 billion set in 2000.

Stronger U.S. economic growth pushed imports steadily higher through the first eight months of this year, peaking at $121 billion in August. But imports slipped slightly in September and then tumbled to $117 billion in October.

The October decline was led by capital goods, which fell $1.4 billion from September, and consumer goods, which slipped $1.3 billion.

Manufacturers said the latest trade figures were more bad news for their sector because they showed overseas economies remain weak. The strong U.S. dollar also makes U.S. goods more expensive, they said.

Exports declined about $800 million in October to $81.93 billion.