US trade deficit in Sept shows biggest fall in 5 years

WASHINGTON: Helped by falling oil prices, America’s trade deficit showed a sharp improvement in September, narrowing by the largest amount in more than five years. However, the politically sensitive deficit with China rose to a new record of $23bn, pushed higher by a flood of Chinese-made televisions, cell phones and toys being imported to stock American store shelves for Christmas.

The overall deficit declined 6.8% to $64.3bn in September after it had hit an all-time high of $69bn in August. The drop of $4.7bn was the biggest one-month decline since February ’01. In other news, the number of Americans filing new claims for unemployment benefits fell by 20,000 to 308,000 last week.

The big improvement in September’s trade deficit reflected a $3.1-bn fall in America’s foreign oil bill, which declined 10.5%, to $26.3bn. That decline helped to push total imports down by 2.1% to $187.5bn in September while US exports edged up 0.5% to an all-time high of $123.2bn.
UK trade deficit slims to £6.56bn.

Britain’s trade deficit also narrowed slightly as expected in September. The Office for National Statistics said that Britain’s goods trade gap narrowed to £6.56bn in September from £6.856bn in August. The goods trade gap with non-EU countries narrowed more than expected to £3.854bn.

The figures showed significant falls in exports and imports recorded for the 3 months to September, but the ONS said the data should be treated with caution because the changes reflected lower trade in commodities associated with VAT fraud.

Britain’s trade figures are heavily distorted by the effects of the so-called carousel fraud and economists say the trade data are therefore an unreliable indicator of what is happening in the economy. Nonetheless, the value of trade affected by VAT fraud has fallen, dipping to 1.0 billion pounds in September from a peak of 4.5 billion in June and March this year.

The ONS said the value of trade affected by carousel fraud this year now totals 26.3 billion pounds. In simplistic terms, the actual value of the fraud is around 17.5 percent of that total, the ONS said.