WASHINGTON: The U.S. trade deficit widened unexpectedly in October as exports fell to a three-year low, suggesting that trade could again weigh on economic growth in the fourth quarter.
The Commerce Department said on Friday the trade gap rose 3.4 percent to $43.9 billion, a sign that the worst of the drag from a stronger dollar was far from over. September’s trade deficit was revised up to $42.5 billion from the previously reported $40.8 billion. The government revised trade figures going back to April to incorporate more comprehensive and updated quarterly and monthly data.
Economists had forecast the trade gap shrinking to $40.5 billion in October. When adjusted for inflation, the deficit increased to $60.33 billion from $57.37 billion in September.
Trade subtracted 0.22 percentage point from gross domestic product in the third quarter, which expanded at a 2.1 percent annual rate. The dollar’s 18.6 percent appreciation against the currencies of the United States’ main trading partners since June 2014 has eroded export growth.
Exports fell 1.4 percent to $184.1 billion, the lowest level since October 2012. Exports of goods were the lowest since June 2011. Food exports were the lowest since March 2012, while exports of industrial supplies and materials were the weakest in five years. Petroleum exports hit their lowest level since December 2010.
Imports dipped 0.6 percent to $228.0 billion in October. Imports of industrial supplies and materials fell to the lowest level since May 2009. Petroleum imports were the lowest since November 2003, reflecting increased domestic energy production and lower oil prices. The politically sensitive U.S.-China trade deficit fell 9.1 percent to $33.0 billion.
