The U.S. trade deficit unexpectedly declined in January as both exports and imports fell, while the volume of imported crude oil dropped to its lowest level in more than a decade.
U.S. exports dipped for the first time in nine months, but imports fell more steeply, leading to a $2.6 billion drop in the trade deficit, which totaled $37.3 billion in January, the Commerce Department reported Thursday.
"One month's decline in trade volumes does not mean that the trade recovery is over," said Nigel Gault, chief U.S. economist for IHS Global Insight. "But it indicates that future gains will be less dramatic than in the second half of 2009."
Overall, American exports fell just $0.5 billion (0.3 percent) to $142.7 billion following a 3.4 percent surge in December.
Except for December, January's exports represented the highest total since October 2008, when U.S. exports were in free fall from their July 2008 record level of $164.4 billion to their cyclical nadir of $121.7 billion in April 2009. January's exports were down 13 percent from that all-time peak.
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U.S. exports of capital goods decreased in January by more than $1 billion, led by a $474 million drop in civilian aircraft. Exports of autos and parts fell by $544 million. On the plus side, pharmaceutical exports jumped $553 million, and the export of services climbed by nearly $200 million.
Imports fell more steeply than exports, dropping $3.1 billion (1.7 percent) in January to $180 billion. In December, however, imports jumped $8.6 billion.
Compared to their record peak of $229.3 billion reached in July 2008, when the average price of imported crude oil hit nearly $125 per barrel, total imports for January were down 22 percent.
The price of imported crude ticked up less than 1 percent to an average of $73.89 per barrel in January. But that's down more than 40 percent from its 2008 record peak. On the other hand, it's up nearly 90 percent from a year ago, when imported crude cost less than $40.
