The US trade gap narrowed sharply in November after two months of record deficits. But economists remained divided over whether the US's massive trade imbalance was likely to improve over the longer term.

The deficit for November narrowed by $3.9 billion (€3.24 billion) to $64.2billion, helped by a strong rise in exports of capital goods and a fall in the price of imported energy.

Exports rose by 1.8 per cent, led by a 27 per cent increase in exports of civilian aircraft. Exports of civilian aircraft have increased two-and-a-half-fold since a strike at Boeing curbed shipments in September.

Overall, the swing in aircraft sales accounted for a quarter of the improvement in the deficit.

The bill for imported energy fell by $2 billion. This was entirely due to falling prices, since the volume of imports climbed sharply. Real petroleum product imports rose by 6.8 per cent in November after a 6.5 per cent surge in October. There was also a $1.1 billion decline in imports of consumer goods.

"We have seen an improvement after a couple of months of sharp deterioration," said Bruce Kasman, head of economic research at JP Morgan. "Overall, there are some signs that the underlying deterioration in the trade position may be slowing. The outlook for exports is certainly looking brighter and import demand should weaken."

Peter Hooper, chief US economist at Deutsche Bank, said he remained to be convinced that the trade position was improving.

"One month's bounce-back is good news but doesn't mean things are turning round," he said. "The underlying picture is still one of deterioration. Unless the dollar is allowed to fall, it looks like the deficit will continue to widen by about half a percent of GDP per year."

The deficit was 5.7 per cent of GDP for 2004. - (Financial Times service)