Falling oil, record exports shrink trade gap

NEW YORK (CNNMoney.com) -- The trade gap fell on lower oil prices and record exports in September, coming in well below Wall Street forecasts, according to a government report Thursday.

Imports outstripped exports by $64.3 billion, according to the Commerce Department, down from the revised $69.0 billion gap for August. The original reading for August of $69.9 billion had been the previous record.

Economists surveyed by Briefing.com had forecast the gap to fall to $66.0 billion in September, on lower oil prices and strong demand for U.S. exports.

The primary driver of the drop in the gap was lower oil prices in the month. The average price of a barrel of imported oil fell 5.4 percent to $62.52 from the record prices set in August.

The lower oil prices led to the part of the seasonally adjusted trade gap attributed to petroleum products falling $4.1 billion, or 15.5 percent from August.

But the non-petroleum part of the trade gap also declined, helped by strong U.S. exports which continued the climb from the previous record set in August. Exports reached $123.2 billion in the month, up $554 million. The export increase was led by a $990 million rise in civilian aircraft. Aircraft maker Boeing (Charts) is the nation's largest exporter.

Still other U.S. companies continued to be challenged by imported goods. The trade gap attributed to auto vehicles and parts continue to rise, as auto exports, primarily to Mexico and Canada, fell by more than the decrease in auto imports in the period. U.S. automakers such as General Motors (Charts), Ford Motor (Charts) and DaimlerChrysler's (Charts) Chrysler Group have continued to lose share to import brands such as Toyota Motor (Charts) and Honda Motor (Charts).

The trade gap with China rose by another $1 billion in the month to just under $23 billion. Over the the first three quarters of 2006, the trade gap with China now stands at $166.3 billion, up 13.6 percent over the year-earlier period.

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