The country's trade deficit plunged nearly 8 percent to a 16-month low in October, largely as a result of declining imports from China connected to trade issues with the Asian giant.
The shortfall slipped to $47.1 billion in the previous month, the government disclosed late Thursday, from a revised $51.1 billion. The narrower deficit might give a boost to the gross domestic product in the fourth quarter if it lasts into December.
The U.S. imported fewer computers, medicines, smartphones, clothes, and toys, as well as other products from mainland China. Imports of Chinese products were down by $1.7 billion to $35.2 billion.
Vehicle exports have also plunged, partly impacted by a month-long General Motors strike that took a heavy toll on demand.
Huge Disparity
The drop in exports represents mainly a recent up-and-down trend based on the pace of the U.S. tariffs on China. Throughout August, businesses scrambled to purchase consumer goods from China before proposed U.S. tariffs came into effect.
Exports decreased by 0.2 percent to $207.1 billion as deliveries of airplane engines and other parts have all fallen. The The U.S. reported a historic surplus of oil for the second month in a row, reflecting the reemergence of the nation as a gas powerhouse.
Nevertheless, in the first three quarters of the year, the U.S. trade the deficit was up $520.1 billion, a relative with $513 billion in the same period last year.
While tariffs caused a record deficit in trade with China to fall in the current year, the disparity has expanded with other nations, putting the US in no better position.
The US shortfall has increased this year generally because the economy is faring better compared to most other economies.
Narrowing in Trade
A good number of Americans can still afford to buy new cars and other imported products. A sluggish economic performance around the globe has also created a weaker demand for U.S. products.
A bigger trade imbalance hampers a country's gross domestic product, but the U.S. has run large deficits itself for years and it has had a huge impact on the actions of consumers and businesses.
According to Capital Economics chief adviser Michael Pearce, "the a sharp tightening of the trade deficit to a 16-month low was in part sparked by a General Motor strike-induced fall in car imports and the unwinding of stocks ahead of the September tariffs."
Meanwhile, the Dow Jones Industrial Average and the S&P 500 marginally increased during after-hours sessions as they climbed for the first time on Thursday.
