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Overseas sales reach $140 billion in September spurred by falling dollar

WASHINGTON, DC – 11/09/07 – The sliding value of the dollar has driven US export sales to record highs with the US trade deficit plunging to its lowest level in more than two years, even as worries grow over a surge of mortgage losses, credit write-downs, and fluctuating stock values.

US Commerce Department (DOC) figures released yesterday show that the trade deficit for September dipped by 0.6% to $57 billion from the previous month.

That was the narrowest trade imbalance since May 2005 and took many economists, who had forecasted that the deficit would rise would rise, by surprise.

The improvement in the deficit, the DOC said, came from a full 1% jump in US exports, which climbed to a record $140 billion. The dollars' decline against many major currencies has made US goods cheaper and more competitive in foreign markets.

For September, sales of American-made cars, computers and farm products including corn, cotton, wheat and soybeans were all up.

At the same time, the level of imports also grew during the month, climbing by 0.6% to almost $197 billion, the second highest level on record. Imports of foreign-made cars, televisions and clothing all grew, but oil imports, however, fell by 0.8% to $11 billion.

Through September, the trade deficit is running at an annual rate of $703 billion, down by 7% from last year's $759 billion.

Some analysts believe that surging exports from a weaker dollar will lead to a narrowing of the deficit for the full year, breaking a string of five consecutive records.

The deficit with China rose 5.5% to $24 billion, second only to a $24 billion deficit in October 2006. Imports from the country surged to the second highest level on record, powered in large part by the build-up by retailers of stocks in preparation for the rapidly-approaching Christmas season.

The imbalance with the European Union (EU) dropped a sharp 37% to $6.4 billion. The dollar has fallen to record lows against the 13-nation euro, which means that US products are cheaper in those markets while European goods are more expensive for American consumers.

The deficit with Canada, America's largest trading partner, fell by 3% to $4.9 billion while the imbalance with Mexico fell 9% to $6.3 billion.

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