October 12, 2007	Friday	Ramazan 29, 1428

WASHINGTON, Oct 11: The US trade deficit fell to the lowest level in seven months, helped by record-high sales of American products and the declining value of the dollar. The deficit with China declined as imports edged down slightly following a string of high-profile recalls.

The Commerce Department reported on Thursday that the deficit declined to $57.6 billion (euro40.72 billion) in August, down 2.4 per cent from the July imbalance. It was lowest gap between exports and imports since January and a much better showing than had been expected.

The improvement reflected a 0.4 per cent rise in exports, which climbed to a record $138.3 billion (euro97.77 billion). Sales of farm products, including wheat, soybeans and corn, and exports of industrial products such as chemicals and steel both hit record levels.

Imports actually dropped by 0.4 per cent to $195.9 billion (euro138.48 billion), reflecting lower shipments of foreign cars and furniture, which offset a big increase in the foreign oil bill, which rose to the highest level in a year.

In other economic news, the Labour Department said that the number of newly laid off workers filing claims for unemployment benefits fell by 12,000 last week to 308,000. That was a better showing than had been expected.

The US’s big chain retail stores reported disappointing results in September as lingering summer weather and the severe housing slump dampened consumers’ desire to shop. The biggest losers included apparel sellers. Wal-Mart Stores Inc. reported a modest sales gain, but the increase was below analysts’ expectations.

The politically sensitive trade deficit with China fell by 5.3 per cent to $22.5 billion (euro15.91 billion). US exports were up, led by increased sales of aircraft and soybeans, while imports slipped a slight 0.7 per cent. The decline in imports occurred after a series of recalls of tainted products from toys with lead paint to toothpaste and unsafe tires.

However, the small drop came in such areas as computers and furniture, where there have not been highly publicised recalls. Imports of toys from China actually rose as American retailers stocked their shelves for Christmas.

The boom in US exports is helping to cushion the US economy from the adverse effects of the housing bust and a severe credit crunch. Overseas demand for US goods is being helped by a falling value of the dollar against many other currencies. That development pushes up the cost of foreign vacations and imports for American consumers but makes US products cheaper in foreign markets.

Through the first eight months of this year, the trade deficit is running at an annual rate of $708 billion (euro500.49 billion), down 6.7 per cent from last year’s imbalance of $758.5 billion (euro536.19 billion), which had been the fifth consecutive record deficit.—AP