WASHINGTON (AP) -- The U.S. trade deficit declined to the lowest level in almost two years as exports rose to a record high, a gain that is not expected to last given the global economic slowdown.
The trade deficit narrowed to $41.5 billion in September, the Commerce Department said Thursday. That is 5.1 percent below the August deficit and the smallest imbalance since December 2010.
Exports climbed 3.1 percent to an all-time high of $187 billion, reflecting stronger sales of commercial aircraft, heavy machinery and farm goods. Imports were also up, rising 1.5 percent to $228.5 billion, reflecting a jump in shipments of consumer goods from cell phones to clothing and toys.
So far this year, the U.S. deficit is running at an annual rate of $554 billion, slightly below last year’s $559.9 billion imbalance, which had been 13.2 percent higher than 2010.
The U.S. deficit with China increased to $29.1 billion in September and is running 6.8 percent ahead of last year’s record pace. America’s deficit with China last year was the highest imbalance ever recorded with a single country.
Exports to the 27-nation European Union totaled $21.3 billion in September, unchanged from the August export level. Exports to Latin America showed a 4.2 percent increase in September although exports to Brazil, South America’s biggest economy, fell 1.8 percent. Exports to China, a fast-growing market for the United States, rose 2.1 percent in September.
A wider trade deficit acts as a drag on growth. It typically means the U.S. is earning less on overseas sales of American-produced goods while spending more on foreign products.
In the July-September quarter, the economy grew at an annual rate of 2 percent, a slight pickup from the 1.3 percent expansion turned in from April through June. But trade trimmed the third quarter performance by 0.18 percentage point, reflecting a drop in exports.
Most economists believe that the economy will continue with weak growth of around 2 percent for the final three months of this year. Growth at that level is not fast enough to translate into a significant improvement in the trade deficit.