After five straight months of increases, the U.S. trade deficit fell with its global partners for the first time during the month of November–a major win for U.S. President Donald Trump who instituted tariffs in 2018 to help close the gap.
On Wednesday, government data released showed the gap closed to $49.3 billion from $55.7 billion in October–an 11.5 percent decline. Economists surveyed by Dow Jones were forecasting a deficit of $54.3 billion.
“I can say two things about trade: 1) the numbers are likely to continue to exhibit elevated volatility from month to month as shippers grapple with heightened policy-related uncertainty and 2) today’s data will boost estimates of Q4 GDP growth,” said Stephen Stanley, chief economist of Amherst Pierpont Securities.
The a slide in imports helped to narrow the gap, which fell 2.9 percent to $259.2 billion. In addition, exports edged lower to $209.9 billion, a 0.6 percent drop.
Overall, the year-to-date goods and services deficit rose by $51.9 billion, which represents a 10.4 percent rise from the same time in 2017. Exports rose $157.1 billion or 7.3 percent, while imports increased $208.9 billion or 7.9 percent.
“America’s trade fight with the world has finally started to slow global trade and only time will tell whether this is a good thing for the economy in the long run,” said Chris Rupkey, chief financial economist at MUFG, in a note.