America's Oil Trade Deficit Shrinks To Its Lowest Level In 10 Years

The US trade deficit unexpectedly narrowed in August as the oil deficit fell to a ten-year low.

In August, the trade deficit was $40.1 billion, down from $40.3 billion in July, and below expectations for $40.8 billion.

Exports rose to a record $198.5 billion, according to the latest Balance of Trade report from the Census Bureau.

Bloomberg's Victoria Stilwell noted that the trade deficit fell to its lowest level in seven months, while exports rose to a new record.

Petroleum exports in August rose to $6.05 billion from $5.9 billion in July, while year-to-date petroleum exports are up to $4.8 billion over last year. Stilwell noted that the petroleum deficit shrank to $13.1 billion in August, the smallest since July 2004.

In a note following the report, Ian Shepherdson at Pantheon Macro said, "In one line: Flattered by oil exports but trade will make a hefty contribution to Q3 GDP growth."

Shepherdson added that overall, net trade will add to GDP growth in Q3 and still sees Q3 GDP coming in at 3.5%.

The trade report on Friday was somewhat overshadowed by the latest jobs report, which showed that nonfarm payrolls grew by 248,000 in September as the unemployment ate fell below 6% for the first time in more than six years.

Overall though, a strong morning for the US economy as US trade looks strong and the labor market continues to recover.