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Thursday, December 10, 2009

Trade Balance Improves in October

Marketwatch reports:

The U.S. trade deficit narrowed sharply in October as exports were powered by the weaker dollar and imports slowed to a crawl.

The nation's trade deficit shrank 7.6% in October to $32.9 billion from $35.7 billion in September, the Commerce Department said. The September trade gap had been reported at $36.5 billion.

The narrowing of the deficit was unexpected. Analysts surveyed by MarketWatch had expected the deficit to widen to $37 billion.

The lower deficit also eases fears that the trade balance would deteriorate sharply after the deficit widened sharply last month.

During this recession there has been a sharp drop in international trade that led to a substantial improvement in the U.S. trade deficit.
Good news in the short run, though the longer trend reversal since the economic recovery (i.e. going back to the "norm" of a strong imbalance of imports) remains.



It will be interesting to see what kind of results we get for November and December, but the October print is positive for Q4 GDP.

Source: Census