WASHINGTON, Nov 13: The global financial implosion took a heavy toll on US trade in September, hitting both imports and exports, according to a government report Thursday underlining the world’s economic woes.

In a report that highlights the slowdown in the world’s biggest economy and a likely global recession, the Commerce Department said the US trade deficit narrowed 4.4 per cent in September to $56.5 billion.What normally would be seen as an improvement in the trade balance set off alarms with a record drop in imports and a steep fall in exports.

The data spotlighted weakening economic conditions both in the United States and its trading partners on the eve of a Group of 20 summit of industrialised and emerging nations in Washington aimed at confronting the worst financial crisis since the Great Depression.

Imports showed the steepest drop on record of 5.6 per cent to $211.9 billion, led by shrinking oil imports, as American consumers retrenched amid rising unemployment, shrinking investment portfolios and falling home prices.

Exports fell by the biggest amount since September 2001, a month marked by the terror attacks in the US, plunging 6.1 per cent to $155.4 billion.

“This month’s trade figures provided a foretaste of what is to come,” said Nigel Gault, chief US economist at IHS Global Insight.

“If we look out over the next 12 months, both export and import volumes will drop -- meaning not just slower growth, but outright declines -- as the global recession reduces trade activity,” Gault said.—AFP