Paul Ashworth, chief U.S. economist at Capital Economics, said that most of the improvement reflected a decline in America's foreign oil bill. He predicted that the deficit will remain close to 3 percent of the total economy or slightly below through all of next year.
The deficit in the monthly trade report, which just tracks merchandise and services, increased in October as U.S. exports fell by a larger margin than imports, a development that was seen as a sign that slower global growth was beginning to weigh on the U.S. economy.
The overall economy grew at an annual rate of 2.7 percent in the July-September quarter, but many economists believe growth has slowed to less than 2 percent in the current quarter. They believe that consumers and businesses have grown more cautious about spending and making investments because of the uncertainty over what Congress will do about the "fiscal cliff."
That is the term used for the increases in taxes and spending cuts that will occur automatically in January unless Congress and President Barack Obama reach a budget deal to avert them. Economists have warned that the adverse impact on the economy will be great enough to push the country back into a recession.