WASHINGTON (AP) — The U.S. trade deficit narrowed in October to its lowest point of the year as Americans bought fewer foreign cars and imported less oil. Exports of American-made autos also fell.
The Commerce Department said Friday that the trade deficit shrank 1.6 percent to $43.5 billion. That's down from September's revised figure of $44.2 billion.
Exports slipped 0.8 percent to $179.2 billion, the first drop after three months of gains. Shipments of industrial supplies, such as natural gas, copper and chemicals, fell. Exports of autos and agricultural goods also dropped.
Imports fell 1 percent to $222.6 billion, reflecting a 5 percent decline in oil imports. The average price of imported oil fell for the fifth straight month to $98.84, the lowest since March.
A lower deficit can boost economic growth because it typically means foreign nations are buying more American goods. That can lead to more jobs and higher consumer spending, which fuels 70 percent of economic activity.
The deficit shrank every month in the July-September quarter, as exports grew. That contributed almost a half-point to the economy's 2 percent annual growth rate in the quarter.
Rising consumer demand in the United States could push imports higher, particularly as the holiday shopping season gets under way. Retailers reported that shoppers got off to a healthy start over the Thanksgiving holiday weekend. And consumer confidence rose sharply last month, though it is still below levels that are consistent with a healthy economy.
There are also signs hiring is picking up. The number of people seeking unemployment benefits last week fell to its lowest level in nine months. That suggests companies are more confident about the economy's growth and are laying off fewer workers.
The unemployment rate fell to 8.6 percent in November, its lowest level in two and a half years. Employers added a net total of 120,000 jobs. Still, half the drop in the rate resulted from a decline in the work force. Many of the unemployed gave up looking for jobs.
In October, Congress approved free trade agreements with South Korea, Colombia and Panama, after four years without any new trade deals. The administration says the three deals will boost U.S. exports by $13 billion a year.
The politically sensitive trade deficit with China narrowed in September after setting an all-time high in August. So far, it is on track to set a record as the highest imbalance the United States has ever recorded with a single country.
In October, the Senate approved legislation that would allow the administration to impose penalty tariffs on Chinese products sold in the United States if China does not do more to allow its currency to rise in value against the dollar. The bill faces an uncertain fate in the House.
Critics charge that China is keeping its currency artificially low against the dollar to make Chinese goods cheaper in the United States and American products more expensive in China.