US trade deficit narrows in October as exports rise | International Trade News

The October deficit was 17.6% below the $ 81.4 billion peak in September, the Commerce Department said Tuesday.

The U.S. trade deficit narrowed to $ 67.1 billion in October, the six-month low after a record high in September. A large rebound in exports helped offset a much smaller rise in imports.

The October deficit was 17.6% below the $ 81.4 billion peak in September, the Commerce Department reported on Tuesday. It was the lowest monthly deficit since the $ 66.2 billion imbalance in April.

The strong rebound in exports is seen by economists as evidence that global supply chains are beginning to loosen, and they believe a smaller deficit this quarter could give a strong boost to overall US economic growth.

There were gains in many export categories, which means that the booming global economy has begun to boost demand for U.S. products. Demand for U.S. imports was ahead of export sales, as the U.S. economy recovered faster than other countries from the pandemic.

In October, exports rose 8.1 percent to $ 223.6 billion, and imports were down 0.9 percent to $ 290.7 billion. The deficit is the difference between what the US exports to the world and the imports it buys from foreign nations.

The politically sensitive trade deficit with China, the largest in any country, fell 14 percent in October to $ 31.4 billion. In the first 10 months of this year, China’s trade deficit with goods is 13.7 percent higher than a year ago.

The overall U.S. trade deficit was $ 705.2 billion this year, up 29.7 percent from the same period a year ago. Trade flows fell sharply last year as the COVID pandemic curtailed economic activity.

Part of the October increase in exports reflected a rise in oil exports, showing that Ida has returned to more normal operations in the Gulf Coast refineries closed by Hurricane Ida.

The large gains in U.S. auto-exports and imports suggest that it was beginning to alleviate the shortage of computer chips that reduced self-production, a trend highlighted by the auto industry leaders.

Andrew Hunter, senior US economist at Capital Economics, predicted that the improvement in the trading image would add 1 percentage point to US economic growth in the current October-December quarter. Gross domestic product is expected to grow at a rate of 6.5 percent year-on-year this quarter, a significant improvement from a modest 2.1 percent growth rate in the third quarter.

While the trade report showed that they were alleviating supply chain problems, Hunter noted that although the number of waiting vessels anchored in U.S. ports has dropped in recent weeks, they remain at “historically high levels.”

He also warned that the emergence of a new coronary virus variant of Omicron and the resumption of travel restrictions that may be resumed could hamper trade in services in the coming months.

Tuesday’s report showed a $ 83.9 billion deficit in goods in October, and $ 16.8 billion in U.S. trade in services, including payments for airlines and other travel.