American Trade Gap Narrows; Phone, Car Import Prices Fall

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The American trade balance narrowed more than expected in September as the nation bought less foreign oil and other goods.

Other economic reports yesterday showed jobless claims dropped and import prices decreased.

The American deficit in international trade of goods and services shrank to $64.30 billion from $68.96 billion in August, the Commerce Department said. Wall Street was looking for a trade gap of $65.80 billion.

Exports climbed to a record high while imports declined for the first time in seven months. The American economy has weakened since the beginning of this year, increasing at a rate of 1.6% July through September after rising 2.6% in the second quarter and 5.6% in the first quarter.

“The decreasing imports likely reflects some easing in manufacturing demand,” a Wachovia Corp. economist, Jason Schenker, said.

Ironically, the 6.8% decline in the trade deficit likely means economic growth for the third quarter will be adjusted upward. The government first revision of gross domestic product July through September is due out November 29.

American imports decreased to $187.46 billion in September from $191.57 billion in August. Imports of capital goods like telecommunications equipment decreased by $555 million. Purchases of cars and parts made abroad decreased, down by $413 million. Imports of foods and beverages declined by $103 million.

The volume of crude oil imports dropped, down to 316.59 million barrels from 343.49 million. The average price of a barrel of crude fell by $3.60 to $62.52. The value of crude oil imports decreased to $19.79 billion from $22.71 billion in August.

While imports overall dropped, purchases of consumer goods made abroad climbed by $562 million in September.


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