WASHINGTON – A jump in energy-related exports and a steep decline in oil imports lowered the U.S. trade deficit in December to nearly a three-year low.
The improvement suggests the economy grew in the October-December quarter instead of shrinking as the government estimated last week.
A brighter outlook for trade also illustrates how a boom in oil and gas production is reducing crude oil imports and making the U.S. a leader in the export of fuels. And it shows that higher domestic sales of fuel-efficient cars are lowering dependence on oil.
The trade gap fell nearly 21 percent in December from November to $38.6 billion, the Commerce Department said Friday.
Total exports rose 2.1 percent to $186 billion, driven in part by record exports of gasoline, diesel and other fuels.
At the same time, imports declined 2.7 percent to $225 billion. That was largely because oil imports plunged to 223 million barrels – the fewest in 15 years.
“While we may see some giveback in the coming months … the trend of a narrowing petroleum trade gap will continue to drive improvement in the overall trade balance,” Michael Dolega, an economist at TD Bank, said in a note to clients.
A narrower trade gap boosts growth because it means U.S. companies earned more from overseas sales while consumers and businesses spent less on foreign products.
Fewer exports were one of the reasons the government’s first estimate of economic growth in the October-December quarter showed a contraction at an annual rate of 0.1 percent. The December trade deficit figures were not available when the government reported its estimate last week.
Some of the gain from trade will be offset by a decline in December wholesale stockpiles.
Overall, economists at Barclays Capital expect the government’s second estimate for fourth-quarter growth will be revised upward to a still-weak annual rate of 0.3 percent.
The monthly trade figures can be volatile. Still, economists see the trade picture brightening in 2013, helped by new technology that has made U.S. fuel cheaper.
For all of 2012, the trade deficit narrowed 3.5 percent to $540.4 billion.