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Economy Title: Trade Gap in U.S. Unexpectedly Falls as Oil, Auto Imports Drop March 11 (Bloomberg) -- The trade deficit in the U.S. unexpectedly narrowed in January as demand for foreign oil and automobiles dropped. The gap decreased 6.6 percent to $37.3 billion from a revised $39.9 billion in December as Americans imported the fewest barrels of crude oil in a decade, Commerce Department figures showed today in Washington. Exports decreased 0.3 percent, the first decline since April, on fewer shipments of commercial aircraft and autos. Imports may rebound in coming months as oil prices climb, consumer spending improves and a growing economy prompts companies to replenish depleted inventories. By the same token, the recovery in global growth and a weaker dollar is projected to lift overseas sales at manufacturers including Cisco Systems Inc., signaling factories will keep leading the U.S. expansion. “Export gains in recent months have been extremely large so it’s unrealistic to expect every month will be a blockbuster,” Nigel Gault, an economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “The trade year high reached on March 9, 2009. “Rising exports will be an important driver for manufacturing,” said IHS Global Insight’s Gault. San Jose, California-based Cisco, the biggest maker of networking equipment, said it sees “underlying strength” in the economy and that customers are saying they need to spend more on technology. ‘Positive’ Trends “We see very positive spending trends across all of our business segments” and across the world, Ned Hooper, who is in charge of Cisco’s consumer unit and mergers and acquisitions, said on March 3 at a conference in San Francisco. Imports fell 1.7 percent to $180 billion from $183.1 billion in December. The U.S. imported 245 million barrels of crude oil in January, the fewest since February 1999. The decrease swamped an increase in oil prices. Purchases of foreign-made automobiles and parts dropped by $1.48 billion, led by decreases in purchases of German and Japanese cars. After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit shrank to $41 billion from $43.8 billion. The January figure was in line with the fourth-quarter average, indicating trade so far is not influencing growth estimates. The economy, emerging from the worst recession since the 1930s, expanded at a 5.9 percent annual pace in the fourth quarter, the most since 2003. Exports accounted for 2.32 percentage points of growth, the biggest contribution in 13 years. Focus on Exports President Barack Obama has said the U.S. needs to shift its growth toward expanding exports and investment rather than consumption as in the past. He plans to increase government- backed export financing for small businesses by 50 percent, to $6 billion a year. Stronger overseas sales were one reason Parker Hannifin Corp., the world’s largest manufacturer of hydraulic equipment, raised its 2010 earnings estimate in January. “We’re coming off the bottom,” Donald E. Washkewicz, chairman and chief executive officer of the Cleveland-based company, told analysts. “Asia is extremely strong.” The International Monetary Fund, in a January report, projected that emerging-market and developing economies will expand 6 percent as a group this year, compared with 2.1 percent for developed nations. Today’s report showed the trade gap with China was little changed at $18.3 billion from $18.1 billion in the prior month. China, the world’s biggest exporter, this week reported its trade surplus shrank to the lowest level in a year in February as exports surged 46 percent from a year earlier, while imports rose 45 percent. The nation has prevented any rise in the yuan against the dollar since July 2008 to aid exporters.
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