The gap between imports and exports shrank 4 percent to $39.9 billion, the lowest since February 2003, from a revised $41.6 billion deficit in November that was wider than previously estimated, the Commerce Department said today in Washington. Imports fell to the lowest since 2005.
Mounting job losses, a lack of credit and a global downturn signal that imports and exports, both of which fell in December for the fifth straight month, will slide further. Some U.S. firms are lobbying for a ``Buy American'' provision in President Barack Obama's stimulus plan, while nations such as France and Russia are taking steps to protect local jobs and production.
The trade gap was estimated to narrow to $35.7 billion, from an initially reported $40.4 billion in November, according to the median forecast in a Bloomberg News survey of 70 economists. Deficit projections ranged from $31 billion to $45 billion.
For all of 2008, the U.S. trade deficit narrowed to $677.1 billion from $700.3 billion in the previous year.
Imports in December dropped 5.5 percent to $173.7 billion, the lowest since September 2005, from $183.9 billion the prior month as U.S. consumers bought fewer foreign-made cars and trucks and oil prices fell. Purchases of clothing, furniture and household appliances from outside the U.S. also declined, further reflecting shrinking demand for foreign-made goods.
The average price of imported oil fell to $49.93 a barrel, the lowest since December 2005, from $66.72 in November, the report said.
Exports in December fell 6 percent to $133.8 billion. Sales abroad of U.S.-made automobiles, parts and engines fell to the lowest level since November 2004.
After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit widened to $43.3 billion from $40.1 billion.
The trade gap with China narrowed to $19.9 billion, while the trade deficit with Canada shrank to $2.8 billion.
Imports from the European Union increased, causing the trade gap with the bloc to widen to $7 billion.
U.S. gross domestic product is forecast to contract again this quarter after shrinking at a 3.8 percent annual pace from October to December, the most since 1982, as consumer spending, about 70 percent of the economy, plunged.
Trade, which has added to the U.S. economy since the first three months of 2007, will be less of a help in coming quarters, economists predict.