Deficit of $57.2 billion is wider than forecasts; oil imports jumped
WASHINGTON (MarketWatch) -- The weak U.S. economy pushed down exports and imports in October, but the overall deficit rose as the volume of oil imports spiked, a government report showed Thursday.
The nation's trade deficit widened 1.1% to $57.2 billion from $56.6 billion in September, the Commerce Department said. Read full government report.
The jump in the deficit surprised analysts. The consensus forecast of Wall Street economists had been for the deficit to narrow to $54.5 billion. See Economic Calendar.
Behind the rise was a record increase in the quantity of imported crude oil.
With global trade slowing given the severe downturn in economic activity in all major trading nations, economists expect the U.S. trade gap to shrink over time.
Indeed, the deficit's three-month moving average has been declining steadily since mid-year.
For the first 10 months of the year, the trade gap is $590.9 billion, compared with $582.8 billion over the same period last year. But the year-to-date deficit is below the pace in 2006 when the trade gap hit a record $753.3 billion.
In October, exports fell 2.2% to $151.7 billion, while imports fell 1.3% to $208.9 billion.
Exports of goods alone fell 3.4% in October to $104.8 billion. All major subcategories of exports shrank in October. Exports of U.S. goods were the lowest since January.
A strike at Boeing Co did not help matters. Exports of civilian aircraft fell a sharp 27.9% in October.
Imports of goods alone fell 1.5% to $174.6 billion in October.
The U.S. imported more consumer goods, food and industrial supplies, but fewer capital goods.
Imports of autos and auto parts were the lowest since September 2003.
The imported value of crude oil rose sharply to $29.8 billion in October, despite a record decline in the average price per barrel of crude oil to $92.02 from $107.58 in September.
The U.S. imported 324.2 million barrels of crude oil in October, up from 253.3 million in September.
As a result, the petroleum deficit widened 2.4% to $32.7 billion.
Crude spot prices have fallen back sharply in recent weeks, but import prices lag badly behind the spot, economists said.
The U.S. trade deficit with China hit a record $28 billion in October, up from $27.8 billion in September and $25.9 billion one year ago. The U.S. imported a record $34 billion in goods from China.
For the first eight months of the year, the deficit with China totaled $143.3 billion, up from $126.3 billion in the same period last year.
In a separate report, the Labor Department reported that jobless claims jumped 58,000 to 573,000 in the latest week. See full story.
Labor also reported a sharp drop in import prices in November.
