US trade deficit narrows to near three-year low

A rise in US exports in December has helped the country to close its trade gap with the rest of the world.

Figures show the trade deficit shrank to $38.5bn, the smallest level in nearly three years.

Record petroleum exports helped to push total exports to $186.4bn, up $3.9bn from November. Imports fell $6.2bn to $224.9bn.

The data suggests that the US economy was stronger in the fourth quarter than initially estimated.

The 0.1% annualised contraction in Gross Domestic Product (GDP) in the quarter was calculated before these figures were available and were based on projections of a widening trade gap.

Chris Williamson, chief economist at financial information firm Markit, says the latest release shows that "the economy did not fare as badly as the initial GDP estimate suggested in the fourth quarter".

"The data also add to an increasingly bright picture of the global economy at the turn of the year."