"Trade Gap in U.S. Narrows More Than Estimated as Exports Hit Two-Year High"

[Clio the Leo]

Trade Gap in U.S. Narrows More Than Estimated as Exports Hit Two-Year High
By Shobhana Chandra - Dec 10, 2010 9:02 AM ET

The trade deficit in the U.S. shrank more than forecast in October as a weaker dollar and growing economies overseas propelled exports to a two-year high.

The gap narrowed 13 percent to $38.7 billion, less than the lowest estimate of 78 economists surveyed by Bloomberg News and the smallest since January, Commerce Department figures showed today in Washington. Exports were the strongest since August 2008 as Mexico and China bought record amounts of U.S. products.

3M Co. and General Dynamics Corp. are among companies that will probably benefit from growing demand in markets like China, Brazil and South Korea, which this year are among the top-10 buyers of American-made goods. Imports stagnated in October as U.S. demand for crude oil plunged, an outcome that may prove to be temporary as the world’s largest economy picks up.

“Exports will continue to do well as the generally weaker dollar and strong growth in emerging markets are helping,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, who projected the trade gap would narrow. “Things are improving in the economy so we expect to see imports pick up as well. We’ll have export-led growth in the U.S. next year as exports grow faster than imports.”

Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.2 percent to 1,230.6 at 9:01 a.m. in New York. Treasury securities fell, pushing the yield on the benchmark 10-year note up to 3.26 percent from 3.21 percent late yesterday.

http://www.bloomberg.com/news/2010-12-10/trade-deficit-narrows-more-than-forecast-as-exports-rise-to-two-year-high.html