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Last Updated: Friday, 9 March 2007, 14:51 GMT
Strong exports narrow US deficit
textile worker in Vietnam
The US economy has suffered record trade deficits five years in a row
Exports from the United States have reached a record high, helping to narrow the country's trade deficit.

During January the gap between imported and exported goods fell to $59bn (£31bn), down from December's $61.5bn.

However, the trade gap with China rose by 12% to $21.3bn and is destined to trigger new accusations of unfair trade practices and a weak Chinese currency.

The unemployment rate, meanwhile, fell slightly to 4.5%, although job creation was at its weakest in two years.

According to the Labor Department, the US economy added 97,000 jobs in February, displaying fairly robust growth despite the weakness in the housing and car markets.

At the same time, though, the department said more jobs had been created during December and January than originally reported, with 146,000 new jobs in January and 226,000 in December - up from an earlier estimate of 111,000 and 206,000 respectively.

Planes, PCs and soybeans

The strong performance of the US export industry, with exports of goods and services rising by 1.1% to a historic high of $126.7bn, was mainly driven by sales of aeroplanes, computers and agricultural products, especially soybeans and wheat.

US shoppers, meanwhile, held back spending their money on foreign cars, toys and television sets.

The trade imbalance with the European Union fell to its lowest level in three years, a reflection of the weak dollar and the strong euro, which makes US exporters more competitive and European products very expensive to American shoppers.

In 2006, the US economy suffered its fifth record trade deficit in a row, reaching $765.3bn.

A third of that was the result of trade imbalances with China.


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