The US trade deficit widened to $42.24 billion in October, primarily because the gap with China hit record levels and fuel consumption and costs went up.
The October report reflected an overall 4.9% increase from the downwardly revised gap of $40.28 billion in September. The deficit with China rose 1.4% to a record $29.5 billion.
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Imports from Japan rose and exports declined, increasing the deficit with Japan by 45% ($2.2 billion) to $7 billion.
The inflation-adjusted or real deficit report narrowed slightly to $46.17 billion in October from September’s $46.62 billion.
This is the number that is used to measure the impact of the trade deficit on US gross domestic product (GDP).
Sales of US goods fell across the board but exports to Mexico increased to a record $20.5 billion, which helped to shrink that deficit by 8.5%.
In general, US imports fell 2.1% but exports also fell by 3.6%. Interestingly, the US deficit with Europe also widened by more than 16% despite that region’s ongoing debt
and financial woes.