US Trade Deficit Narrows by Most in 5 Years; Deficit with China at Record $23 billion in Sep.

The U.S. international trade deficit  in goods and services narrowed to $64.3 billion in September 2006, $4.7 billion less than the $69.0 billion in August, according to the U.S. Bureau of Economic Analysis. Total September exports were $123.2 billion and imports were $187.5 billion. The drop of $4.7 billion in September was the biggest one-month decline since February 2001.

In September 2006, the goods and services deficit was down $0.7 billion from September 2005. Exports were up $16.8 billion, or 15.8%, and imports were up $16.2 billion, or 9.4% from 2005.

The big improvement in September's trade deficit was driven by a $3.1 billion fall in America's foreign oil bill, which declined 10.5%, to $26.3 billion. That decline helped to push total imports down by 2.1% to $187.5 billion in September while U.S. exports edged up 0.5% to an all-time high of $123.2 billion. (AP)

However, the total trade deficit is on track to set a record for a fifth consecutive year. Through September, the deficit is running at an annual rate of $781.6 billion, surpassing last year's all-time high of $716.7 billion.

The deficit with China rose to a new record of $23 billion in September, pushed higher by a import of Chinese-made televisions, cell phones and toys. So far this year, the deficit with China is running at an annual rate of $221.7 billion, on track to surpass last year's $202 billion deficit,  which had been the biggest deficit ever with a single country.

America's deficit with Canada, the country's biggest trading partner, dropped to $5.7 billion in September. The deficit with the 25-nation European Union fell to $7 billion, down from $11 billion in August.

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