WASHINGTON -- The U.S. trade deficit fell in November to its lowest level in four years, an encouraging sign for economic growth. Gains in energy production and stronger sales of American-made airplanes, autos and machinery lifted exports to an all-time high.
The trade gap dropped 12.9 percent in November to $34.3 billion, the Commerce Department said Tuesday. That's the smallest monthly trade deficit since October 2009
Exports rose 0.9 percent to a record $194.9 billion, aided by a 5.6 percent rise in petroleum exports. Imports dropped 1.4 percent to $229.1 billion. A decrease in demand for foreign oil offset a record level of imported autos.
Through 11 months of 2013, the trade deficit is 12.3 percent lower than the same period in 2012. Exports have strengthened, while imports are slightly lower.
A smaller trade deficit can boost economic growth. It typically shows that American companies are earning more from sales overseas, while U.S. consumers are buying fewer products from foreign companies.
Economists said the narrower deficit should boost economic growth in the October-December quarter.
Jennifer Lee, senior economist at BMO Capital Markets, noted that the gap declined in both October and November. She is currently forecasting growth at an annual rate of 2.4 percent. But after the trade report she said growth could end up being stronger.
"Growth should get a lift from trade in Q4," she said.
A domestic energy boom has boosted exports and lessened America's dependence on foreign oil. U.S. petroleum exports were up 10.8 percent through the first 11 months of 2013 compared with the same period in 2012. In that same period, petroleum imports have fallen 11.5 percent.
The drop in oil imports has been helped by lower global prices. After peaking at $102 per barrel in September, the average price of a barrel of imported crude oil has fallen and averaged $94.69 a barrel in November. Analysts are predicting the price of imported oil will decline further, noting ample supplies and a strengthening dollar
The U.S. deficit with China fell 6.7 percent in November from October to $26.9 billion. U.S. exports to China hit a record. The U.S. deficit with China, the largest with any country, is still on track to set another record this year.
The deficit with the European Union dropped 29.4 percent in November to $10.1 billion. That reflected a big drop in imports from that region, which offset a small dip in U.S. sales to Europe.
The overall economy grew at an annual rate of 4.1 percent in the July-September quarter. Much of that strength reflected a buildup in business stockpiles. Economists believe inventory building slowed in the October-December quarter, which could dampen growth.
Still, other data have been encouraging. The rise in exports has lifted factory output. And a stronger job market has made Americans more confident in the economy and led to more spending. Those factors could offset some of the drag from lower inventory growth.
Many analysts are forecasting economic growth in the fourth quarter at an annual rate of around 2.5 percent. And they expect growth will accelerate in 2014, helped by further gains in exports, more job growth and less drag from the federal government.