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Last Updated: Friday, 12 May 2006, 14:19 GMT 15:19 UK
Surprise fall in US trade deficit
Goods about to be shipped from Shanghai
US exports to China hit a record $5bn in March
Record exports to China helped produce a surprise fall in the US trade deficit for March - hitting $62bn (33bn), its lowest level in six months.

The Commerce Department said the gap narrowed 5.6% from February, its biggest decline in a year.

Market watchers had expected the trade shortfall to grow to about $67bn as a result of higher oil imports.

The politically sensitive deficit with China grew to $15.6bn, but US exports to the country hit a record $5bn.

Boost for US exports

The figures came on the same day that China reported a slight fall in its trade surplus, from $11.2bn in March to $10.6bn in April.

US politicians and manufacturers have been putting pressure on the Chinese government to revalue its currency, the yuan, which they say is too weak against the dollar and makes Chinese exports artificially cheap.
Shoppers in a discount Chinese store
Some US politicians blame China for its trade woes

The total US trade deficit for the first three months of 2006 was $196.2bn, leaving it set to beat last year's record of $724bn.

But some analysts are predicting that stronger economies in Europe and Asia, and the recent fall in the value of the dollar, could give US exports a boost during the summer.

"There has been a clear pick-up in exports and that reflects strength in the global economy," said Jay Feldman, an economist at Credit Suisse Holdings.

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