The U.S. trade deficit narrowed in November, according to data released by the Bureau of Economic Analysis on Tuesday. The trade gap — the difference between total exports and total imports — shrank from -$39.3 billion (revised from -$40.6 billion) to -$34.3 billion, the lowest monthly deficit since October 2009.
Total November exports increased 0.9 percent to a record $194.9 billion, and total imports fell about 1.5 percent to $229.1 billion, yielding a deficit that was narrower than the -$39.9 billion expected by economists. For the three months ended November, the U.S. ran an average trade deficit of -$38.8 billion (average exports of $192.4 billion and average imports of $231.3 billion), down nearly 4 percent from the the average trade deficit of $40.4 billion (average exports of $190.7 billion and average imports of $231.1 billion) recorded for the three months ended October.
As with October’s data, November’s data bode well for fourth-quarter gross domestic product. November exports set a fresh record high, and continued foreign demand for U.S. goods and services — particularly industrial supplies and, increasingly, energy goods — could support manufacturing.
The export component of the ISM Manufacturing Report on Business registered 59.5 in November and 55 in December, indicating that manufacturing exports were growing in each month. A separate manufacturing purchasing managers’ index maintained by Markit Economics also showed expansion in manufacturing export orders, albeit at a slower rate, with a reading of 51.4 in both months.
The trade report can be used as an indicator of both the health of the U.S. economy and the health of foreign economies. Strong imports typically suggest that the domestic economy is doing well because demand for foreign goods is high, and strong exports suggest the same for foreign economies.
In November, the United States recorded a narrower trade deficit with China (from $28.9 billion to $26.9 billion), the European Union (from $14.3 billion to $10.1 billion), and Japan (from $6.4 billion to $5.8 billion). November exports were led by industrial supplies and materials.