WASHINGTON (Reuters) - The U.S. trade deficit narrowed sharply in January to its smallest in more than six years as imports plunged on weak domestic demand, swamping a big drop in exports, government data showed on Friday
The monthly trade gap fell 9.7 percent to $36.0 billion, compared to the $38 billion gap Wall Street expected, Commerce Department data showed. The deficit has now narrowed for a record six consecutive months, the longest previous run being from April through August 2007.
"The narrowing reflects the ongoing economic downturn. U.S. consumers are pulling back and that's resulting in fewer imports while exports are falling," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania. "It reflects how bad economic conditions are everywhere."
U.S. exports of goods and services fell 5.7 percent from December to the lowest since September 2006 and imports tumbled 6.7 percent to lowest since March 2005.
Meanwhile, a second report showed U.S. import prices fell less than expected in February as imported petroleum prices rose for the first time since July.
Import prices slipped 0.2 percent, the smallest decrease since July, after falling by a revised 1.2 percent in January, the Labor Department said.
WORLD TRADE SLUMP
Total world trade is expected to fall this year for the first time since 1982 as businesses and consumers cut back on spending in response to bleak economic news.
Earlier this week, China reported that its exports plunged 25.7 percent in February from a year earlier while imports declined 24.1 percent.
On a year-to-year basis, U.S. exports were down 16.4 percent in January while imports were 22.8 percent lower, the Commerce report showed. The monthly trade deficit has narrowed 39.1 percent over the same period.
In a sign of the bleak conditions facing the world's automakers, both U.S. imports and exports of autos and auto parts were the lowest since July 1998.
U.S. exports of food, feeds and beverages were slightly higher in January, but other major categories such as consumer goods, capital goods and industrial supplies and material all showed declines.
On the import side, all major categories were lower with another drop in monthly oil prices to $39.81 per barrel cutting the value of U.S. crude oil imports to $11.9 billion, the lowest since February 2005.
The bilateral U.S. trade deficit with China swelled 3.5 percent in January as U.S. exports to China fell much faster than U.S. imports from that country.
(Reporting by Doug Palmer; Editing by Andrea Ricci)
