By Joseph Plocek

WASHINGTON (MNI) - The U.S. January trade balance posted a better-than-expected -$37.3 billion as imports fell in a probably temporary adjustment. As the world economy recovers, markets should brace for deeper U.S. trade gaps ahead.

Imports fell $3.1 billion, more than the $0.5 billion dip in exports, narrowing the trade gap.

The January import drop reflected crude oil imports at -$2.3 billion on a drop in volume. Prices were steady and are rising into the spring, thus suggesting oil import costs could rise in future.

Also in imports was a $1.5 billion drop in autos, -$0.6 billion in computers, -$130 million in civilian aircraft, and drops in consumer goods. The first might relate to slack demand for foreign cars as Toyota's sales fell on recall publicity.

Exports saw -0.5 billion for civilian aircraft and -0.5 billion for autos against gains in many other areas.

The unadjusted trade balance data by country included: China -$18.3 billion against -$18.1 billion in December, Japan -$3.3 billion (lowest since May 2009) against -$4.6 billion, OPEC -$7.2 billion against -$6.8 billion, and Canada -$3.9 billion (highest since Oct 2008) against -$3 billion.

On a GDP basis the real trade balance in January was little changed from its Q4 average. This suggests so far that Q1 trade will be a neutral in the GDP accounts.

The Commerce Department said annual trade revisions, due on June 10, will revise data back to 2007 and will reclassify some services related to foreign military sales as goods. Commerce also revised low value estimates for goods not meeting the filing exemptions, effective with the January data.

**Market News International Washington Bureau: (202)371-2121**