US trade deficit shrinks as oil imports fall

Analysts had expected the trade gap to widen in January

The US trade deficit fell unexpectedly in January, following a big drop in imports of oil and foreign cars.

The US Commerce Department said the trade gap was a seasonally adjusted $37.3bn (£24.9bn), 6.6% lower than the revised December figure of $39.9bn.

Imports dropped 1.7%, with crude oil imports at their weakest level since February 1999, at 245 million barrels.

The politically-sensitive trade gap with China widened to $18.3bn, up from $18.1bn in December.

US exports fell by 0.3% in January, with less machinery, agricultural products and civilian aircraft sold.

The trade gap's fall was a surprise. Economists had expected it to widen further after it increased by nearly 10% between November and December.

"The fact that exports and imports fell in January does not mean that the rebound in world trade is over," said Paul Dales, US economist with Capital Economics.

"Further ahead, though, a fading of the economic recovery is likely to hold back import growth."

The dollar fell against both the yen and the euro after the news was announced.

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