Business

US trade gap shrinks as oil imports drop

WASHINGTON — The US trade deficit narrowed sharply in December because exports rose while oil imports plummeted. The smaller trade gap means the economy almost surely grew in the October-December quarter — an improvement from the government’s estimate last week that it shrank in the final months of 2012.

The trade deficit fell nearly 21 percent in December from November to $38.6 billion, the Commerce Department said Friday. That’s the smallest in nearly three years.

Exports rose 2.1 percent to $186.4 billion. Exports of oil and other petroleum products rose to the highest level on record. Overseas shipments of agriculture goods and aircraft also increased.

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Imports shrank 2.7 percent to $224.9 billion. Oil imports plunged to 223 billion barrels, the fewest since February 1997.

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A narrower trade gap boosts growth because it means US companies earned more from overseas sales while consumers and businesses spent less on foreign products.

Associated Press