Washington – The U.S. trade deficit improved in September after hitting an all-time high, helped by lower oil prices. The imbalance with China, however, soared to a record as retailers stocked their shelves for Christmas.
The overall deficit declined 6.8 percent to $64.3 billion in September from a record $69 billion in August, the Commerce Department reported Thursday.
The drop of $4.7 billion was better than expected and represented the biggest one-month decrease in more than five years.
The improvement came from a 10.5 percent fall in America’s foreign oil bill, which dropped to $26.3 billion. The volume of imports fell, and crude-oil prices had a big decline. They now are about $60 per barrel after hitting $77 per barrel in the summer.
Analysts said the improvements should continue if oil prices do not spike again. But they cautioned against a quick fix in a deficit still on track to set a record for the fifth straight year.
“There is little in this report to tell me that once we get past the petroleum effect, there are any basic changes in the trade situation,” said Joel Naroff, chief economist at Naroff Economic Advisers. “With the Congress changing hands, the political pressure on the administration to do something about China is likely to build.”
The deficit with China set a record of $23 billion in September. It is running at an annual rate of $228 billion this year, on pace to surpass last year’s $202 billion; that was an all-time high for any U.S. trading partner.
The September increase came from higher imports of Chinese cellphones, TVs and toys as U.S. retailers planned for Christmas.
Democratic Rep. Nancy Pelosi of California, expected to be the new speaker of the House, has been an outspoken critic of China’s human rights record; other Democrats are pushing legislation that would penalize China unless it allows its currency to rise in value against the dollar as a way of making U.S. products more competitive in China.
The large decline in oil helped push total imports down by 2.1 percent to $187.5 billion in September. U.S. exports, helped by a big jump in sales of commercial aircraft, rose by 0.5 percent to an all-time high of $123.2 billion.
