A rise in exports and lower imports of oil helped push the U.S. trade deficit to its narrowest point in nearly three years in December, suggesting the economy did much better in the fourth quarter than initially estimated.
The country's trade gap narrowed to $38.5 billion during the month, the Commerce Department said on Friday. Analysts polled by Reuters had expected a deficit of $46 billion.
"Trade data for December paint a reassuring and encouraging picture of the US economy at the end of last year," said Chris Williamson, chief economist at Markit.
That suggests the U.S. government will revise upward its advance reading for fourth-quarter gross domestic product, which showed the economy contracted at a 0.1 percent annual rate in part because of a decline in inflation-adjusted exports.
The government had released its estimate for fourth-quarter GDP before the December trade data was available. That GDP report projected a decline in December exports. (Read More: Why This Is 'Best-Looking' GDP Drop You'll Ever See)
Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors, said December's data could add 0.7 percentage point to the fourth-quarter GDP reading.
Friday's data showed U.S. exports surged by $8.6 billion during the month, boosted by sales of industrial supplies, including a $1.2 billion increase of non-monetary gold.