Exports, the lone bright spot in the U.S. economy for much of the year, declined for a third straight month in October as major global economies fell into recession.

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Exports, the lone bright spot in the U.S. economy for much of the year, declined for a third straight month in October as major global economies fell into recession.

The drop was worsened by the strengthening dollar, which makes U.S. exports more expensive overseas.

For much of 2008, exports helped the economy “muddle through” the recession, says IHS Global Insight economist Brian Bethune.

“When the domestic economy became weak, one of the things that kept the factories running was exports,” he says.

Now that global demand for U.S. goods and services is diminishing, more American jobs could be lost. Unemployment is already at the highest rate in decades.

One offset to shrinking exports is falling imports. If imports decline at a faster rate, the trade deficit shrinks and gross domestic product rises.

The drop in energy prices has pushed down imports. They fell about 7 percent in October and November combined.

David Rosenberg, chief economist at Merrill Lynch, expects imports to fall more than exports, resulting in a big narrowing in the trade deficit.

This would be a reversal from October, when exports dropped at a faster pace, swelling the trade deficit.

But Thomson Reuters economist Jeoff Hall expects the deficit to widen.

“We can’t export our way out of this as long as the dollar gets stronger,” he says. We don’t need another drag on GDP — and we’re expecting the trade balance to hit a record.”

For his part, Bethune thinks imports and exports may drop off at about the same pace through 2009.

Like many economists, he says the export boom is over. But he expects U.S. consumer spending to come to the rescue, picking up in the second half of next year.