U.S. trade deficit drops to 4-year low

• Trade gap declines almost 13%25 to %2434.3 billion
• It%27s the smallest monthly trade deficit since October 2009
• Exports jump to a record

The U.S. trade deficit fell to a four-year low in November as exports hit another record and oil imports continued to decline, boosting estimates for last quarter's economic growth.

The trade gap fell 12.9% to $34.3 billion, a significantly smaller total than economists forecast and lowest since October 2009. A narrower gap lifts U.S. economic growth as American manufacturers and services companies sell more products overseas and U.S. consumers buy relatively fewer foreign goods and services.

The shrinking trade balance should add as much as a percentage point to fourth-quarter economic growth, RDQ Economics estimates. That would push many economic forecasts for the final quarter of 2013 to an annualized 3%.

Economist Patrick Newport of IHS Global Insight says that trend is not likely to continue this year because stronger economic growth and consumer spending will push up imports.

But Paul Ashworth of Capital Economics says declining U.S. oil imports should more than offset stronger domestic consumption, narrowing the trade gap slightly again.

In November, exports rose nearly 1% to an all-time high of $194.9 billion on stronger overseas sales of civilian aircraft and engines; industrial supplies, including chemicals and crude oil; and autos.

Imports dropped 1.5% to $229.1 billion as oil imports continued to fall. Oil imports fell 10.6% in November to $21.4 billion and were down 13.7% the first 11 months of last year vs. the same period in 2013.

The U.S. is benefiting from an oil boom in states such as North Dakota and Texas as a result of new drilling techniques, sharply reducing the nation's dependence on foreign oil. The U.S. is expected to surpass Russia and Saudi Arabia as the world's top oil producer by 2015 and become self-sufficient in oil production in the next two decades, according to recent estimates by the International Energy Agency.

Imports of consumer goods and food also declined in November.

More broadly, the trade deficit has fallen slightly since early 2012 and is sharply lower than the record imbalances reached before the 2008-09 recession. Ashworth cited rising U.S. oil production as well as the falling dollar, which makes U.S. goods more attractive to foreign countries. Stronger exports have helped fuel a manufacturing revival.

The U.S. deficit with China dropped 6.7% in November to $26.9 billion. The U.S. gap with China is the largest of any country. But manufacturers are expected to continue to bring production back to the U.S. from China, and the Chinese government has allowed its currency to appreciate in response to U.S. prodding — factors that could continue to narrow the gap in coming years, Ashworth says.

"Definitely, the offshoring (of production) to China has slowed to a trickle," Ashworth says.

The trade gap with the European Union fell 29.4% in November to $10.1 billion because of a sharp drop in imports from region.

The deficit with Japan fell 8.4% to $5.8 billion.