Trade deficit narrows to $1.5B in October

Record imports lift US trade deficit to $48.7 billion in October, highest since January

Total U.S. exports were $195.9 billion in October, down by less than $0.1 billion from September. Economists surveyed by The Wall Street Journal had expected a narrower deficit of $47.5 billion.

October exports were $195.9 billion, down less than $0.1 billion from September exports.

Prices were up 1.5 per cent and volumes increased 1.2 per cent.

Apart from the $1.5-billion increase in crude oil imports, the higher US import bill was due to the highest on record imports of food, feeds, and beverages, and the highest on record non-petroleum imports. Import volumes fell 3.9 per cent while prices rose 2.4 per cent. Increased imports of consumer goods, including cellphones, also contributed to the month's rise.

Exports to China, meanwhile, were the highest in nearly four years, at US$13 billion.

But trade deficits this year - which have reached $462.9 billion and are up 11.9 percent from last year - are on track to eclipse 2016 levels and will likely climb to more than $500 billion by year's end. The U.S. crude oil imports rose to $10.664 billion in October from $9.131 billion in September.

The reason for the deficit is that "Americans are spending more than they produce". But that was overwhelmed by a $69.1 billion deficit in the trade of goods.

World trade flows have grown this year, as global economies are growing in sync and at almost the best paces since the recession.

The Trump administration has focused its trade policy efforts on lowering the trade deficit, arguing that the United States has been shafted in trade deals such as the North American Free Trade Agreement.

He added, "Together with the depreciation of the dollar this year, we think export growth should rebound over the coming months, suggesting that net trade should be broadly neutral for economic growth next year".

Narrowing this trade deficit has been one of President Donald Trump's priorities since taking office, and he has turned a critical eye toward trade agreements made among multiple countries. Mr. Trump also pulled the US out of the Trans-Pacific Partnership in early 2017, a pact that would have bound closer together the economies of 12 nations.

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