The US trade deficit unexpectedly shrank for the fifth consecutive month in August, as imports of cars and auto parts fell to their lowest level in 20 months, the US Commerce Department said today.
The trade gap totalled $39.2 billion, down from a revised tally of $40 billion in July and the lowest level since February. Analysts surveyed before the report had forecast the August trade deficit to expand to $41.3 billion.
US trade in the services sector set new records in August on both the import and export side.
The data showing that the United States' ominously large trade deficit was starting to shrink gave the dollar a boost against the yen and the euro in early trading.
The massive power outage on the US East Coast and Canada in August also had an impact on the trade figures, analysts said.
The trade deficit with China hit a monthly record at $11.7 billion - the biggest the United States has with any single country. Imports from the Asian manufacturing giant were also a record at $13.7 billion.
Overall US imports fell 2.5 per cent to $122.9 billion - led by a $2.3 billion drop in imports of automotive vehicles, parts and engines - to their lowest level since January 2002.