Gap falls to $40.4 billion on record decline in imports The U.S. trade balance with the rest of the world plunged by 29% to $40.4 billion in November on a record decline in oil prices and much weaker demand for imports, the Commerce Department reported Tuesday. Imports fell a record 12% to $183.2 billion, the lowest level in two and a half years, as the average price of imported petroleum dropped by $25.30 a barrel to $66.72. Exports fell 5.8% to $142.8 billion, led by weakening foreign demand for industrial supplies and capital goods. The figures are not adjusted for price changes, but are adjusted for seasonal variations. The nominal trade deficit was much lower than the $50 billion expected by economists surveyed by MarketWatch. October's trade gap was revised lower to $56.7 billion from $57.2 billion. Much of the improvement in the trade gap in November was accounted for by falling prices. In November, import prices fell 6.7%, largely because of falling global demand for petroleum, chemicals, metals and other commodities. Petroleum prices fell 32%. However, in even inflation-adjusted terms, the trade gap for goods narrowed by 13.5%, a sharp reminder of the severe economic slump that's clamping down on global trade. Inflation-adjusted imports of goods fell 6.8% to the lowest level in four years. Inflation-adjusted exports fell 3.3% to the lowest level in 17 months. The lower trade deficit will likely add to U.S. growth in the fourth quarter, but it's still likely to be the biggest drop in gross domestic product in a generation. Economists currently expect GDP to fall 5.1% annualized. Details In current-dollar terms, the trade deficit of $40.4 billion is the lowest since November 2003. The picture with almost every major trading partner improved in November. The deficit with Canada was the lowest in more than six years, the deficit with Mexico was the lowest in three years, and the deficit with the oil-exporting cartel was the lowest in nearly five years. Imports from China dropped by $5.7 billion (not seasonally adjusted), while imports from Japan were at the lowest level since 2004. The United States recorded a surplus with Central and South American for the first time since 1999. Imports of goods fell 14% to $149.7 billion, while exports of goods fell 7.2% to $97.2 billion, Imports of services fell 2.3 to $33.6 billion while exports of services fell 2.5% to $45.6 billion. Imports of industrial supplies fell 25% to $48.2 billion, led by petroleum products and natural gas. Imports of consumer goods fell 9.4% to $36.6 billion, led by drugs. Imports of capital goods fell 5.9% to $35.1 billion, led by computers. Imports of autos fell 6.7% to $16.4 billion. Imports of foods and feeds 5.6% to $7.3 billion, led by fruit, fish and wine. Exports of industrial supplies fell 13% to $27.3 billion, led by petroleum products. Exports of capital goods fell 3.8% to $36.5 billion, led by semiconductors. Exports of aircraft rose 7.1% as the strike at Boeing Co. ended. Exports of consumer goods fell 1.7% to $13.1 billion, led by artwork. Exports of autos fell 11% to $9 billion. Exports of foods and feeds fell 6.6% to $7.7 billion, led by meat, poultry and corn.

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