The gap shrank 2.4 percent to $57.6 billion, the smallest since January, from a revised $59 billion in July, the Commerce Department said today in Washington.
Foreign companies, benefiting from growing demand and a weaker dollar that's made American goods less expensive, have been snapping up Boeing Co. aircraft and General Electric Co. turbines. Rising exports will help keep the economy from falling into recession even as the housing slump persists.
``The dollar is continuing to decline, which is giving a huge boost to competitiveness,'' Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts, said before the report. ``There is going to be a big contribution to overall growth'' in the third quarter.
Economists had forecast the deficit would narrow to $59 billion, from a previously reported $59.2 billion in July, according to the median of 74 forecasts in a Bloomberg News survey. Estimates ranged from $57 billion to $62.3 billion.
Prices of goods imported into the U.S. rose 1 percent in September as costs for oil shipped from overseas jumped to a record, a Labor Department report also showed. Prices excluding oil fell 0.2 percent, the biggest drop since October 2006.
A separate report from Labor showed the number of workers filing first-time claims for unemployment benefits declined more than forecast to 308,000 last week.
The trade report showed exports rose 0.4 percent to $138.3 billion, led by demand for food and industrial supplies such as cotton and metals. Imports fell 0.4 percent, the first decline since April, to $195.9 billion.
A jump in petroleum costs prevented imports from dropping even more in August. Petroleum import prices rose to a record $68.09 a barrel.
Rising oil prices may keep the trade imbalance from shrinking in coming months. Crude oil futures reached a record close of $83.32 on the New York Mercantile Exchange on Sept. 20 and have remained near that level since.
The government excludes the effect of prices on trade when calculating its impact on economic growth. On that basis, the gap shrank to $52 billion, the smallest since February 2004.
The U.S. is scheduled to release its advance estimate of third-quarter growth on Oct. 31. Net exports added 1.32 percentage points, the most in more than a decade, to the second-quarter's 3.8 percent growth rate.
A weaker dollar is supporting exports by making U.S. goods cheaper abroad. The dollar is down more than 10 percent since the beginning of 2006 against a basket of currencies of major trading partners, according to Federal Reserve figures.
Also, growth in other countries is outpacing that of the U.S. The economy in countries that use the euro expanded 2.5 percent in the year ended in June, and China grew 12 percent, compared with a 1.9 percent increase in the U.S.
``International is a great opportunity for us,'' NCR Corp. Chief Executive Officer Bill Nuti said in an interview Sept. 26.
NCR will focus on boosting overseas sales of products such as self-service grocery checkout machines, Nuti said.
GE, the world's biggest maker of turbines for power plants, said Oct. 8 it will supply six gas-turbine generators and related services to Electricitie de France SA, an agreement valued at more than $750 million. The Fairfield, Connecticut-based company projects revenue from outside the U.S. will increase to $130 billion by 2010, from $80 billion in 2006.
A cheaper dollar may also be boosting gains in tourism to the U.S. The nation's surplus in services grew to a record $9 billion in August mainly reflecting an increase in travel.
The trade deficit with China, the second-largest U.S. trading partner behind Canada, narrowed 5.4 percent to $22.5 billion in August as American companies exported a record $5.9 billion worth of goods.<...