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Fri, Dec 20, 2002 - Page 12 News List

Trade gap narrows to US$35.1 billion in US after dispute

BLOOMBERG , WASHINGTON

The US trade deficit fell in October to the narrowest in seven months as a labor dispute closed West Coast ports and companies imported capital goods at the slowest pace in four years.

The US$35.1 billion trade gap in goods and services followed a US$37.1 billion shortfall in September, the Commerce Department said. Imports declined 2.4 percent, while exports fell for a third straight month.

"It's all because shipments were delayed or postponed or sitting in the harbor," said Robert Gay, a fund researcher at Commerzbank Securities in New York.

US imports of capital goods in October dropped to US$22.1 billion, the lowest since August 1998, from US$23.6 billion. The decline reflects the reluctance of businesses to purchase new equipment until profits grow, economists said. FedEx Corp, the world's largest overnight delivery service, said it plans to reduce its capital spending by US$200 million in fiscal 2003.

Fed Ex said that its revenue increased 10 percent in the September-November quarter in part because the company flew more packages across the Pacific.

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