The U.S. trade deficit fell to its lowest level in two years as of September, as the weakening dollar caused a surge in selling of U.S. products globally.
The deficit fell to $56.5 billion, a drop of 0.6 percent over the total of $56.8 billion in august, according to the Commerce Department. This is the lowest level since May 2005.
Industries that led the way in exports were food, consumer goods, automobile industry and industrial sales. Exports increased by 1.1 percent to a record $140.1 billion.
For the first nine months of the year, the trade balance has continually narrowed, as it has shrunk from the 2006 same-period total of $581.6 billion, down to $527.5 billion.
The shrinking of the trade deficit implies there is stronger economic activity than expected, and as Sal Guatieri of BMO Capital Markets says, "It's a larger improvement than anticipated (and) likely will lead to a revision of growth in the third quarter. We could see the GDP number revised to 4.5 percent or so."
Originally the government said the gross domestic product (GDP) would increase by only 3.9 percent.
For American manufacturers, the weak U.S. dollar will continue to help them, and the trade deficit will continue to drop.
Thomas Duesterberg, head of the Manufacturers Alliance/MAPI said the trend should continue in line with the weakness of the dollar, and is "one of the few remaining pillars of growth in the weakening US economy."
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