US trade deficit narrows

The US trade deficit narrowed more than expected in March due to the reduction in imports of cars and crude oil, as caused by a weakened economy and the record high oil prices.

This effect has meant that the trade deficit has shrunk greater than forecasts as consumer spending has been cut significantly as cutbacks are being experienced except for necessary items which has caused imports to suffer.

The gap itself narrowed to $58.2 billion which the Commerce Department revealed today in Washington.

The February trade gap was originally reported as $62.32 billion.

It is the smallest gap this year and it represents the smallest gap with China since 2006.

The dollar fell again today and is trading at $1.5444 per euro from $1.5393 yesterday.

The economists forecast for the trade gap were far more conservative with the average gap would narrow to $61 billion although forecasts ranged from $59 billion to $64.9 billion.

The reducing trade deficit has helped boost the gross domestic product, it will not be enough to keep the US economy out of recession as the low levels of consumer confidence are likely continue to fuel the downturn.

Analysts at Lehman Brothers Holdings Inc. indicated that the smaller trade gap will lift the estimate for first-quarter growth.

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