WASHINGTON (Reuters) - The U.S. trade deficit narrowed unexpectedly in October as the weak U.S. dollar helped boost exports and demand for imported oil fell to its lowest daily level since January 2000, a Commerce Department report showed on Thursday.
The trade gap shrank 7.6 percent to $32.9 billion, from a downwardly revised estimate of $35.7 billion in September. Analysts surveyed before the report had expected the gap to widen to about $36.8 billion.
In sign that world trade is slowly shaking off the effects of the global financial crisis, U.S. exports of goods and services were the highest since November 2008 and imports the highest since December 2008.
The smaller-than-expected trade gap is likely to prompt analysts to raise their estimates of fourth-quarter economic growth and is good news for the Obama administration, which sees export growth as an avenue for creating jobs.
Overall trade volume remains well below last year. But the bigger drop in imports than exports in 2009 could cut the trade gap almost in half from last year's $696 billion.
The deficit totaled nearly $304 billion through October versus $611 billion in the same period in 2008.
The U.S. dollar was lower against the euro after the report, while U.S. stock index futures trimmed gains.
U.S. exports jumped 2.6 percent to $136.8 billion, led by increased shipments of civilian aircraft, semiconductors and other capital goods. Foreign demand for U.S. pharmaceutical products and other consumer goods also was higher.
Meanwhile, U.S. imports grew a bare 0.4 percent to $169.8 billion. Increased shipments of capital goods and consumer goods were almost completely offset by reduced demand for industrial supplies and materials.
At the same time, imports of autos and auto products were the highest since the depth of the crisis in October 2008. U.S. auto exports were also the highest since December 2008, with the weak dollar helping to make U.S. brands more competitive.
A drop in the average price for imported oil in October to $67.39 per barrel after rising for seven consecutive months also helped shrink the trade gap.
The volume of imported oil also plunged to 8.349 million barrels per day, the lowest in nearly 10 years, from 9.541 million in September.
The closely watched U.S. trade deficit with China widened in October to $22.7 billion, the highest since November 2008.
U.S. exports to China rose to a record $6.9 billion, but were still swamped by the highest imports from the Asian giant since October 2008.
(Reporting by Doug Palmer, Editing by Andrea Ricci)