US Trade Deficit Shrinks Most in Almost 5 Years

- The Trade Deficit for October shrunk to -$58.9 billion versus estimates of -$63.0 billion and -$64.3 billion in September.

BOTTOM LINE: The US Trade Deficit shrank the most in almost five years in October as the price of imported oil dropped and US exports surged, Bloomberg reported. Imports of goods and services dropped 2.7% in October, the most since December 2001. The average price per barrel of imported oil declined to $55.47 versus $62.52 the prior month. US exports rose to $123.6 billion on increasing demand for computers, drilling equipment and medicines. I expect the US trade deficit to only improve modestly over the intermediate-term as falling prices more than offsets an acceleration of US demand.