"Oil had reached unsustainable levels, and now the oil market is correcting, so we will see remarkable declines in the nation's imported oil bill, but from historically high levels. That will continue to lower the trade deficit," Dawson said. "But the pull-back in spending by U.S. consumer also can be seen. Consumers have put away their wallets, and hopefully their credit cards, due to the recession. We will record a substantial decline in retail sales year-over-year in 2008 and because many of those products are imported, the trade deficit will decline further."

In September, imports of industrial supplies fell 11%, consumer goods declined 8%, and autos/auto parts fell 4%; capital goods increased 1%. Concerning exports, auto/auto parts fell 13%, food / feeds declined 11%, industrial supplies declined 11%, capital goods decreased 10%, and consumer goods fell 4%.

Economists generally prefer that a nation run a trade surplus as opposed to a trade deficit, as it usually implies that a nation's goods are competitive on the world stage, its citizens are not consuming too much, and that it's amassing capital for future investment and economic goals.

Economic Analysis: Oil tumbles, and it lowers the U.S. trade gap. Imagine how much lower the trade deficit would be if the U.S. developed alternate energy sources and increased auto fuel efficiency? The Obama Administration plans to do both, to point the nation toward what it should be doing: running a trade surplus.