US trade gap narrows in October as oil exports surge

Oil refinery Texas The US has been promoting its domestic oil and gas industries

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The US trade gap narrowed in October, as rising sales of oil pushed US exports to a record high, the US Commerce Department has said.

The trade deficit shrank to $40.6bn (£24.8bn) from $43bn in September, a drop of 5.4%.

Exports rose 1.8%, while petroleum exports rose 9.3%. The increase broke three months of falling exports.

Meanwhile, the Federal Reserve has said in a report that the economy is growing at a "modest to moderate rate".

Imports rose by just 0.4% while oil imports were 1.5% higher.

The figures showed US exports to China hit a record high as its trade gap with the Asian power narrowed.

Exports to Canada and Mexico also reached a new high, but imports from the European Union increased and the US's trade deficit with the EU hit a record.

Analysts say the smaller trade deficit, which was broadly in line with expectations, would help the US economic recovery.

It suggests American firms are selling more products abroad while buying less from foreign competition.

In the US, the domestic oil boom has been due mostly to fracking, a new technique used to get oil from shale deposits in locations such as North Dakota and Texas.

But the technology has come under fire by critics concerned about the environmental impacts of the procedure.

The US Energy Information Administration says imports now make up 40% of US oil consumption - down from the 60% peak reached in 2005.

Growth

Meanwhile, the Federal Reserve has said that the US economy saw steady growth through October to late November.

All 12 of the Fed's regions reported growth, with most sectors also reporting expansion.

Manufacturers were optimistic about near-term growth prospects, and retailers had also been hopeful ahead of the holiday shopping season that kicked off last week with Black Friday.

Hiring improved in five of the districts, with the other seven reporting little change.

However, the Fed noted that employers were worried about the workforce skills base.

"Difficulty with finding qualified workers, especially for high-skilled positions, was frequently reported," the report said.

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