Trade Deficit in U.S. Shrinks as Exports Climb to Two-Year High

The U.S. trade deficit shrank more than forecast in September as exports climbed to the highest level in two years, showing a weaker dollar is helping strengthen the economic recovery.

The gap narrowed by 5.3 percent to $44 billion, smaller than the $45 billion median estimate of economists surveyed by Bloomberg News, according to Commerce Department figures today in Washington.

A 7.5 percent drop in the dollar over the past four months is making American goods cheaper overseas as demand in emerging economies propels sales for companies like General Electric Co.

U.S. exports increased 0.3 percent to $154.1 billion, the most since August 2008. Sales of American-made civilian aircraft, which are often volatile, climbed by $698 million. Boeing Co., the largest U.S. civilian aircraft maker, shipped 25 planes overseas in September, up from 17 in August, according to company data.

The outlook for U.S. exports is holding up as emerging economies from China to India and Brazil modernize infrastructure and more affluent households are able to afford goods and services from abroad.

Imports dropped in September, reflecting less demand for foreign-made autos and consumer goods like pharmaceuticals and clothing. American demand for capital goods made overseas climbed to a record, indicating business investment in computers and software continues to improve.

The overall deficit with China decreased as U.S. imports of goods dropped.

Trade Deficit in U.S. Shrinks as Exports Climb to Two-Year High, Bloomberg
11/11/2010 4:23:44 AM