The U.S. trade deficit narrowed more than expected in December despite record prices for imported oil, while another month of record exports helped shrink the annual trade deficit for the first time in six years, a government report on Thursday showed.
The December trade gap narrowed 6.9 percent from November to $58.8 billion, the biggest month-to-month drop in over a year. Wall Street analysts surveyed before the report had pegged the December deficit at $61.5 billion.
The smaller-than-expected trade gap will likely prompt economists to raise their estimates of fourth quarter U.S. economic growth.
The trade deficit totaled $711.6 billion for all of 2007, down 6.2 percent from the record set in 2006 and the largest annual percentage drop since 1991.
Good world economic growth and a weakening dollar have propelled U.S. exports to new heights, while imports also continue to set records. Economists estimate that net exports contributed about one-half percentage point to U.S. economic growth in 2007.