I can confirm the issue with version 3.7. In my case I'm setting shrinkToFit to true, but the grid is showing a horizontal scroll bar only if there is also a vertical scroll bar. That is, it appears to be calculating the necessary width to fit the grid before the data is loaded (I'm using xml loaded from a URL). Once the data is loaded and a vertical scroll bar is needed, then the content no longer fits and jqGrid draws in a horizontal scrollbar.

Interestingly, resizing the grid (I've enabled that option) by dragging the bottom right corner even a millimeter, will cause the columns to shrinkToFit again and now take into account the vertical scroll bar space, so the horizontal scrollbar goes away.

I've been unable to figure a workaround by trying to fire resize events into the grid, but I'm probably trying the wrong thing so far. Could this be marked as a bug to fix in the grid for the next release?