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Lower imported oil prices and robust international demand for U.S. goods narrowed the U.S. trade deficit to $58.9 billion (8.4%) in October -- a nearly five-year low. This despite a record shortfall with China, which will soon surpass Mexico as America's second-largest trading partner behind Canada. The weaker dollar may continue to spur U.S. exports to Asia and Europe, which continue to show strong demand for U.S. goods. This may be enough to keep the U.S. economy expanding despite ongoing weakness in the domestic housing sector. Imports of goods and services fell 2.7% in October, the most since December 2001, to $182.5 billion; exports rose 0.2% to $123.6 billion. Economists had expected the October trade deficit to be $63 billion. Treasury Secretary Paulson will travel to Beijing this week to address the broadening trade gap, among other issues.

• Sources: New York Times, WSJ, Bloomberg, MarketWatch, Reuters
• Related commentary: WSJ: Economists react, U.S. Trade Deficit: Not as Ominous as it Sounds, Why The Dollar Hasn't Collapsed Amidst The Trade Deficit, Investing in China: Rapid GDP Growth Rates Indicate Prosperous Future

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Source: U.S. Trade Deficit Narrows To Near Five-Year Low