US deficit falls to decade's low

Washington: The US trade deficit unexpectedly fell in May to the lowest level in almost a decade as exports jumped while imports of crude oil and auto parts declined.

The gap between imports and exports decreased 9.8 per cent to $26 billion (Dh 95.5 billion), the smallest deficit since November 1999, from a revised $28.8 billion in April that was lower than previously estimated, the Commerce Department said.

Imports fell while exports rose the most since July 2008.

A shrinking deficit signals trade will contribute more to US growth as exports to emerging economies such as Brazil increase.

Meanwhile, US demand for imported auto parts was held down in May by production cutbacks and factory shutdowns by General Motors Corp and Chrysler LLC.

"Orders for durables in the past few months have picked up and some of that demand is coming from overseas," Zach Pandl, an economist at Nomura International Securities Inc in New York, said before the report.