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Friday, 17 May, 2002, 13:45 GMT 14:45 UK
US optimistic as trade deficit shrinks
US economy graphic
US exports grew faster than the country's imports in March, causing its trade gap to narrow, according to the latest official figures.

Separately, an influential survey shows that US consumer confidence improved during early May.

The University of Michigan preliminary consumer sentiment index rose to 96.0 in May, indicating a rise in consumers' optimism.

The rise from 93.0 in the final April reading took economists by surprise; they had forecast a fall to 92.7.

Cars and aircraft

The US trade deficit shrank to $31.63bn, 0.4% narrower than the $31.75bn trade gap recorded in February.

Exports rose 0.6% during March, fuelled by a rise in the demand for American cars and car parts, commercial aircraft and computers, the US Commerce Department noted.

The exports rise offset a 0.3% rise in imports.

"Exports are up nicely, imports are a little worse than I expected," said Standard & Poor's chief economist David Wyss.

Expensive oil

The imports rise was largely attributed to a sharp rise in crude oil prices.

"We had a big boost in imports of oil," said Brown Brothers Harriman economist Ara Rhame.

US oil imports rose 15.7% to $6.83bn during the month after a $2.62 rise in the price of a barrel of crude oil to $19.18.

Consumer spending

The imports growth was also attributed to healthy spending levels in the high-street.

"What the implication, in part, is that the US consumer is helping the global economy enter a recovery phase and that's what we're seeing in the stronger imports," said Nomura Securities chief economist, David Resler.

"Our trading partners are benefiting as well as our domestic producers from the strong growth in consumer spending.

"And should that continue it'll be a benefit to the global economy."

See also:

09 May 02 | Business
US budget surplus shrinks
06 May 02 | Business
Wall St dives on economic doubts
03 May 02 | Business
US joblessness hits eight-year high
18 Apr 02 | Business
IMF more bullish on world economy
16 Apr 02 | Business
Prices rise in the US
07 Mar 02 | Business
Greenspan upbeat on US recovery
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