Decline In Trade Deficit

The trade deficit of United States declined in October, reaching its lowest level of 2011 after lesser international cars were brought by Americans. Another reason that contributed to the shrinking trade deficit was the import of less oil.

Over the summer, declining trade gap provided a boost to growth and may do it again in the last three months of the fiscal year. The Commerce Department revealed that there was a 1.6 percent narrowing in trade deficit and the trade deficit of the country now rests at $43.5 billion. The trade deficit of United States has dropped for the fourth consecutive month.

Imports dropped by 1 percent as they equaled to $222.6 billion and the reason for the overall drop was the 5 percent drop in imports of oil. For the fifth consecutive month in a row, the average price obtained on imported oil dropped to its lowest level ever since the month of March. Last winter, prices of oil increased due to the situation in North Africa and Middle East.

Exports in the economy dropped by 0.8 percent as they rested at a value of $179.2 billion. For exports, this is the first decline in three months as for the past three months, they had been increasing in value. Industrial supplies shipment which include chemicals, natural gas and copper, dropped. Moreover, exports related to agricultural goods, and automobiles also dropped.

A drop in trade deficit implies that the United States economy is on the pathway of recovery. Such positive news is important especially during times of crisis, with the debt crisis piling up and analysts and experts thinking of the world economy to slide in another recession. The US economy needs all the positivity it can get because hopes for the economy seem bleak with the unemployment rate remaining stagnant for months and other factors.