The U.S. trade gap shrank more than expected in November as shipments of aircraft and other capital goods pushed exports to a record high and lower oil prices trimmed imports, government data released Thursday showed.
The monthly trade gap narrowed 5.8% to $64.2 billion, still the third-highest level, from a record $68.1 billion in October, when imports of oil and petroleum products surged to make up for a drop in U.S. output in the Gulf of Mexico after hurricanes Katrina and Rita.
Separate government reports showed that new claims for unemployment benefits rose less last week and import prices fell unexpectedly in December.
The “unexpectedly large” drop in the trade deficit suggests that U.S. economic growth slowed less during the fourth quarter than previously thought, said Paul Ashworth, senior international economist with consulting firm Capital Economics.
The U.S. economy probably expanded at an annual rate of 2.5% in the fourth quarter, versus 4.1% in the third, he said. “We previously feared growth could dip below 2%.”
The Commerce Department report Thursday also showed that the annual U.S. trade deficit set a record last year, even without December’s data. The gap for the first 11 months totaled $661.8 billion, trouncing the annual record of $617.6 billion set in 2004.
U.S. exports of goods and services rose 1.8% in November to a record $109.3 billion. Exports of capital goods and consumer goods set records. Analysts had expected strong aircraft exports after Boeing reported that commercial orders had tripled to a record in 2005.
Oil import prices, which spiked after Hurricane Katrina in late August, fell further in November to $52.16 a barrel. The volume of crude oil imports rose in the month, but the volume of all petroleum-product imports -- which also include butane and propane -- fell from October levels.
Both factors helped trim imports to $173.5 billion, down 1.1% from the record set in October but still the second-highest ever. However, oil prices have jumped to more than $60 a barrel in recent weeks, setting the stage for higher monthly import bills.
A Labor Department report said U.S. import prices unexpectedly fell 0.2% in December as the price of imported petroleum declined for the third straight month.
The politically sensitive trade deficit with China narrowed nearly 10% in November to $18.5 billion, after rising for seven straight months. Despite that, the trade gap with China is on track to top $200 billion in 2005, up sharply from the record $162 billion in 2004.
A separate Labor Department report showed that the number of U.S. workers making new claims for unemployment benefits rose 17,000 last week, slightly less than analysts had expected.