Typically when the US economy contracts, the trade deficit narrows as domestic demand slows. We’ve seen a bit of that during this economic cycle and the trend toward contraction should accelerate with tomorrow’s data. A tumble in oil prices this fall should go a long way toward narrowing the deficit. Economists predict a $51.5 shortfall in November, down from $57.2 in October. This is a macro plus for the dollar, but given the surge in the fiscal deficit and the sharp decline in GDP in Q4, it will be a Pyrrhic victory at best.