WASHINGTON, March 12: The US trade deficit shrank 8.4 per cent in January from a record shortfall in December, the government said on Wednesday, as the sluggish US economy lost its appetite for imports.

The trade deficit contracted to $41.1 billion in January from the record $44.9 billion in December, the most dramatic slimming of the deficit since December 2001.

“The decline in the trade deficit may look nice, but the level is so outrageous that it’s hard to get excited,” said Joel Naroff, president of Naroff Economic Advisers.

Exports climbed in most areas while imports were trimmed by a waning US demand for imported cars and consumer goods, the seasonally adjusted Commerce Department figures showed.

Imports tumbled 2.0 per cent to $123 billion, led by a drop in imports of automobiles and consumer goods.

Exports rose 1.6 per cent to $81.9 billion, with improvements everywhere except the farm sector.

“The reason for the narrowing, a rise in exports combined with a decline in imports, is not exactly the process that we need to see followed,” Naroff said.

“The rest of the world has to start buying more of our goods and they did,” he said. “But on the import side, the slowing economy caused US demand to drop about two per cent. We bought less of everything except oil, and that was due to the surging price.”

On the export side, capital goods exports rose 2.5 per cent to $22.68 billion. Civilian aircraft exports surged 5.8 per cent to $1.38 billion. Exports of consumer goods shot up 6.9 per cent to $74.09 billion.

But automobile imports slumped 4.9 per cent to $16.85 billion, consumer goods imports slid 3.9 per cent to $26.88 billion, and capital goods imports eased 1.1 per cent to $24.34 billion.

The petroleum deficit widened 2.4 per cent to $9.16 billion in January.

Total petroleum imports fell to the lowest level since February 1989, declining to 268.43 million barrels in January from 289.31 million barrels in December.

But as prices soared $3.58 from December to an average $27.73 a barrel in January, a more than two-year high, the cost of petroleum imports rose $458 million, or 6.2 per cent, to $7.44 billion.—AFP