U.S. Trade Deficit Widens Somewhat in October

The U.S. foreign trade deficit in goods and services widened modestly in October to $43.9 billion from $42.5 billion in September. The latter was revised from $40.8 billion. The Action Economics Forecast Survey pointed to a deficit of $40.6 billion. Exports fell 1.4% ( 6.9% y/y) in October, and imports declined 0.6% (-5.2% y/y). In chained 2009 dollars, the trade deficit in goods increased to $60.3 billion from $57.4 billion. Real exports of goods basically reversed a September gain, as they fell 2.4% (-3.2% y/y). Real imports of goods were virtually unchanged in October (+3.7% y/y) following their decline of 1.2% in September.

The October fall in goods exports goods in chained 2009 dollars reflected declines in every major end-use category. Autos fell 1.1% (-5.6%), reversing a 1.3% gain the month before. Nonauto consumer goods dropped 2.9% (unchanged y/y) after jumping 8.3% in September. Foods, feeds & beverages exports were off 6.0% (-4.1% y/y) after their gain of 5.4% in September. Industrial supplies & materials exports fell 4.5% (-3.6% y/y) following a 1.9% rise. Capital goods exports decreased 2.2% (-6.6% y/y), reversing September's 1.9% increase. Only "other goods" increased in October, those by 15.8% (26.8% y/y), after easing 0.7% in September. Services exports improved 0.7% (1.1% y/y) in October, bettering a modest 0.2% rise the prior month.

In chained 2009 dollars, imports of goods were mixed by end-use category in October. Foods, feeds & beverages imports fell 2.0% (-1.1% y/y) after a 1.6% rise in September, and industrial supplies & materials fell 3.0% (-2.5% y/y), reversing a 1.2% increase in September. Other categories rose in October. Auto imports were up 1.0% (+5.5% y/y) after falling 2.9% the month before and, capital goods were up 1.1% (+0.5% y/y) after falling 2.1%. Nonauto consumer goods increased 0.4% (+10.0% y/y), reversing a 1.1% fall in September. "Other" goods imports gained 3.5% (+17.5% y/y), after falling 6.5% the month before. Total nonpetroleum goods imports rose 0.7% (+4.2% y/y) after declining 1.7% in September. Imports of services fell 0.6% (+1.6% y/y) after increasing 1.6% in September, marking the first decrease since June.

Petroleum imports in current prices fell 13.2% in October (-54.4% y/y) after declining 8.3% in September. In chained prices, petroleum imports fell 4.2% in the latest month. The average cost of crude oil per barrel fell further to $40.12 (-54.7% y/y). The value of energy-related petroleum product imports was off 16.5% (-55.7% y/y) and their quantity, measured in barrels, also fell in October, by 10.6% (-5.8% y/y).

By country, the trade deficit in goods with China narrowed somewhat to $33.0 billion in October from September's record $36.3 billion. Exports to China were down 9.9% y/y while imports from China were down 1.7% y/y. The deficit with Japan widened to $5.6 billion. Exports to Japan declined 6.8% y/y and imports from Japan were off 9.6% y/y. The trade deficit with the European Union widened m/m to $13.4 billion. Exports to the EU were up 2.4% y/y while imports from the EU rose 3.3% y/y.

These foreign trade figures add to the preliminary numbers released on November 24 by including trade in services and data by country. The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey, which is carried in the AS1REPNA database.