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Last Updated: Thursday, 12 January 2006, 21:28 GMT
Record US trade deficit narrows
Cockpit of a Boeing plane
Sales of Boeing planes have helped narrow the trade deficit
The US trade deficit has unexpectedly narrowed as lower oil prices cut import costs, helped by record exports of goods such as aircraft.

The November shortfall was $64.2bn, down from $68.1bn in the previous month, the Commerce Department said. Analysts expected a figure near $66bn.

Despite the smaller deficit, the trade gap is still at a record level for the year, hitting $661.8bn after 11 months.

The size of the deficit has raised concerns among analysts.

They have warned that a ballooning of the deficit may unbalance the world's largest economy, as well as weighing on the value of the US dollar.

US trade representative Rob Portman said America was "very open to Chinese products" and demanded "the ability... to sell our products on a more level playing field basis in China".

But an industrial lobby group, the American Manufacturing Trade Action Coalition, accused the Chinese government of "predatory trade practises" and currency manipulation.

The group's executive director, Auggie Tantillo, said the US government should impose hefty tariffs on imports from China - until Beijing agreed to float freely its currency, the yuan.

The yuan is currently pegged to a basket of currencies, and critics say its exchange rate is kept artificially low to make Chinese exports cheaper and more competitive.

Still a concern

November's deficit was still the third biggest monthly total on record, behind September and October.

While November's figures do not signal an end to the problems that are facing the US, they may help fuel some limited optimism.

During November, US exports rose by 1.8% to $109.3bn, helped greatly by a pick up in orders at aircraft maker Boeing.

At the same time, the cost of crude oil dropped from its record levels, trimming the total cost of imports to $173.5bn.

The trade deficit with China also narrowed, falling by 10% to $18.5bn.

US exports to China were little changed at $3.9bn, while imports dropped by 8.4% to $22.4bn.

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