WASHINGTON -- The US trade deficit improved in September after hitting a record high, helped by lower oil prices. The imbalance with China, however, soared to a record as retailers stocked their shelves for Christmas.
The overall deficit declined 6.8 percent to $64.3 billion in September from a record $69 billion in August, the Commerce Department reported yesterday.
The drop of $4.7 billion was better than expected and represented the biggest one-month decrease in more than five years.
The improvement came from a 10.5 percent fall in America's foreign oil bill, which dropped to $26.3 billion. The volume of imports fell and crude oil prices had a big decline. They now are about $60 per barrel after hitting $77 per barrel in the summer.
Analysts said the improvements should continue if oil prices do not spike again. But they cautioned against expecting any quick fix in a deficit still on track to set a record for the fifth straight year.
"There is little in this report to tell me that once we get past the petroleum effect, there are any basic changes in the trade situation," said Joel Naroff, chief economist at Naroff Economic Advisers. "With the Congress changing hands, the political pressure on the administration to do something about China is likely to build."
The deficit with China set a record of $23 billion in September. The big increase came from higher imports of Chinese cellphones, televisions, and toys as US retailers stocked up for Christmas.
Democrats took over both the House and Senate in Tuesday's elections, and many had criticized the Bush administration during the campaign for not doing enough to protect American workers from unfair foreign trade practices. China often was singled out.
The large decline in oil helped push total imports down by 2.1 percent to $187.5 billion in September. US exports, helped by a big jump in sales of commercial aircraft, rose by 0.5 percent to a record high of $123.2 billion.
In other economic news yesterday, the number of people in the United States filing claims for unemployment benefits fell by a better-than-expected 20,000 last week to 308,000, indicating that employers are still resisting widespread layoffs even as the economy slows.