MercoPress. South Atlantic News Agency

US trade deficit in December falls to a record low 39 billion

The US trade deficit fell to the lowest level in nearly six years in December as the recession depressed demand for imports. US Commerce Department said Wednesday that the deficit in December fell 4% to 39.9 billion US dollars from 41.6 billion in November.

For the year, the deficit shrank by 3.3% to 677.1 billion. It was the second straight annual decline after five straight years of record deficits. The 2008 imbalance was the lowest annual total since 2004, and many economists believe the deficit for 2009 will be half the size of last year's gap. However, the improvement is due to a painful recession that is cutting demand for imports of oil, autos and other foreign-made products. The politically sensitive US deficit with China continued rising in 2008, hitting an all-time high of 266.3 billion, the highest imbalance ever recorded with any country. The deficit with China has set records throughout the decade, triggering a political backlash with growing calls for trade sanctions against Beijing for what critics contend are unfair trade practices that have cost US manufacturing jobs. The Bush administration resisted pressure in Congress to brand China a currency manipulator, a designation that could lead to trade sanctions. However, Treasury Secretary Timothy Geithner told Congress last month that President Barack Obama believes China is manipulating its currency, raising the possibility that the new administration will take a harder line. Exports of US goods and services in December dropped 6% to 133.8 billion, the fifth straight monthly decline. Sales of farm products, domestic cars, medical equipment and computers all fell. Imports dropped 5.5% in December to 173.7 billion. Imports of petroleum products fell 6.7% to 22.3 billion, the lowest level in 22 months, as the average price of an imported barrel of crude oil dropped to 49.93, the lowest point since December 2005.