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Domestic Energy Boom Helps to Narrow Trade Gap

WASHINGTON — The U.S. trade deficit in January dropped sharply as both exports and imports fell.

The Commerce Department said Friday that the deficit fell 8.3 percent to $41.8 billion in January from $45.6 billion in December. The shrinking trade gap reflected a drop in exports, which fell $5.6 billion to $189.4 billion. Imports fell $9.4 billion to $231.1 billion.

Much of the dip in imports likely came from lower oil prices and a labor dispute that disrupted shipping at West Coast ports. At the same time, the strong dollar that has made American-made goods less affordable abroad is weighing down exports.

In a separate report, the Federal Reserve said Friday that consumer borrowing expanded $11.6 billion in January following a $17.9 billion gain in December. It was the smallest monthly increase since borrowing rose by $8.3 billion in November 2013.

The trade deficit reached $505 billion last year, up 6 percent from the 2013 deficit of $476.4 billion. It was the largest imbalance since 2012. Economists expect the deficit to widen further in 2015 as stable growth in the United States drives imports and tepid growth overseas paired with a strong dollar depress exports.

The politically sensitive deficit with China was $29.3 billion in January, down from $30.4 billion in December. Still, that constant imbalance has created pressure on Congress and the Obama administration to take tougher actions against what critics see as China’s unfair trade practices. U.S. manufacturers say that China is manipulating its currency to keep it artificially low against the dollar, which benefits Chinese exporters while creating a barrier for U.S goods.

Yet a domestic energy boom has kept the deficit in check.

Not only have oil costs plunged since June, but the U.S. production made possible by fracking has reduced dependence on foreign oil. Between December and January, petroleum imports fell 23 percent to $17.7 billion.

Even though the January increase in consumer borrowing was more modest than the gains over the past year, it still pushed total borrowing to a fresh record of $3.33 trillion, an increase of 6.9 percent over the past year.

Borrowing in the category that includes credit cards actually declined by $1.16 billion in January following a $6.2 billion increase in December and a decrease of $537 million in November. Borrowing in the category that covers auto loans and student loans rose $12.7 billion in January after a gain of $11.7 billion in December.

During the past year, borrowing in the category of auto and student loans has risen 8.3 percent while borrowing in the credit card category has risen a much slower 3.2 percent.

The auto and student loan category has been growing faster than credit card debt since the Great Recession of 2007-2009. That reflects in part the fact that many workers who lost jobs during the downturn decided to take out loans to go back to school and some students opted to stay in school longer because jobs were scarce.

The slowdown in credit card use could reflect greater caution among consumers about taking on debt to finance consumer spending. But economists are hoping that with job growth strengthening so much over the past year, consumers may step up their use of credit cards to finance purchases. That would give a boost to consumer spending and the overall economy.

The government said in a separate report Friday that U.S. employers added 295,000 jobs in February, the 12th straight monthly gain above 200,000.

The Fed’s monthly report on consumer credit does not cover mortgages, home equity loans or other types of loans secured by real estate.

A version of this article appears in print on  , Section B, Page 2 of the New York edition with the headline: Domestic Energy Boom Helps to Narrow Trade Gap. Order Reprints | Today’s Paper | Subscribe

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