U.S. Trade Deficit Widens to $64.26 Billion in October, a Three-Month High
Summary
- Deficit widens as expected in Oct. for the third time in four months.
- Exports down for the first time since June, but imports up for the third month in four.
- Real goods trade deficit widens to $87.04 billion, the largest since July.
- Goods trade deficits w/ China and Japan narrow, while trade shortfall w/ EU rises to a one-year high.
The U.S. trade deficit in goods and services (BOP basis) widened to $64.26 billion in October from $61.15 billion in September ($61.54 billion originally), according to the U.S. Census Bureau. The October deficit was the biggest since July but smaller than the $78.33 billion in October 2022. A $64.3 billion deficit had been expected in the Action Economics Forecast Survey. Exports fell 1.0% m/m (+1.3% y/y) in October, the first monthly fall since June, after a 2.3% increase in September (+2.2% originally). Imports rose 0.2% (-3.2% y/y), the third m/m rise in four months, after a 2.7% September rebound (unrevised).
The deficit in goods trade (BOP basis) rose to $89.80 billion in October, a three-month high, from $86.32 billion in September, but it was smaller the $98.21 billion in October 2022. Goods exports fell 1.8% (-1.2% y/y) in October, the first m/m fall since June, after a 3.1% increase in September. Imports of goods ticked up 0.1% (-3.9% y/y), up for the third month in four, after a 2.7% September rebound. The services trade surplus increased to $25.54 billion in October after declining to $25.17 billion in September; it was larger than the $19.88 billion in October last year. Services exports grew 0.7% (6.8% y/y) in October, the third straight m/m gain, after rising at the same pace in September. Services imports rose 0.4% (-0.4% y/y) following a 2.5% September rise and two consecutive m/m drops.
The real (inflation-adjusted) goods trade deficit (customs value; chained 2017 dollars) widened to a three-month-high $87.04 billion in October from $86.30 billion in September, but it was smaller than the $95.003 billion in October 2022. Real exports of goods eased 0.2% (+1.9% y/y), the first m/m decline since April, following a 2.1% increase in September. Real imports of goods grew 0.2% (-2.3% y/y), the third m/m gain in four months, after a 2.5% rebound in September. A widening trade balance (net exports) has subtracted 0.04%-points from GDP growth in Q3 2023 after adding 0.04%-points in Q2 2023.
The customs value goods trade deficit widened to $89.56 billion in October, the biggest since July, from $86.83 billion in September, but it was smaller than the $97.75 billion in October 2022. The latest figure was in line with an $89.84 billion deficit in the advance report released on November 29. Custom value exports fell 1.4% (-1.3% y/y) in October, the first m/m fall in four months, after a 2.9% gain in September, reflecting m/m drops of 9.0% (+7.3% y/y) in nonfood consumer goods excluding autos, 6.7% (+5.9% y/y) in other goods, 5.8% (+10.2% y/y) in automotive vehicles, parts & engines, and 1.8% (-4.6% y/y) in foods, feeds & beverages. To the upside, exports for industrial supplies & materials rose 2.0% (-9.4% y/y), the fourth straight m/m rise; exports for capital goods excluding autos rose 0.2% (3.3% y/y), up for the fifth successive month.
Customs value imports edged up 0.1% (-3.9% y/y) in October, the third m/m increase in four months, after a 2.7% gain in September, reflecting m/m rises of 2.5% (-1.7% y/y) in capital goods excluding autos and 1.0% (-4.4% y/y) in foods, feeds & beverages. In contrast, goods imports for automotive vehicles, parts & engines (-2.4%; +11.6% y/y), other goods (-1.8%; +3.4% y/y), industrial supplies & materials (-0.5%; -13.8% y/y), and nonfood consumer goods excluding autos (-0.4%; -5.7% y/y) registered their m/m decreases in October. Meanwhile, petroleum imports fell 2.7% (-9.2% y/y) in October, the first m/m fall since June, following a 5.8% increase in September, while nonpetroleum imports rose 0.3% (-3.4% y/y), the third m/m rise in four months, after a 2.5% September rebound.
The 0.7% October gain (6.8% y/y) in services exports was led by rises of 2.5% (10.4% y/y) in insurance services and 2.4% (8.4% y/y) in transport services, while construction services exports fell 9.2% (-43.4% y/y), the second consecutive m/m fall and travel services exports fell 0.7% (+21.9% y/y) following three consecutive m/m gains. The October 0.4% rise (-0.4% y/y) in services imports reflected increases of 1.7% (18.0% y/y) in travel services and 1.0% (-5.9% y/y) in financial services; however, services imports for the use of intellectual property slid 0.5% (-6.9% y/y), the fourth straight m/m slide and transport services imports fell 0.4% (-10.3% y/y), the third m/m fall in four months.
The U.S. goods trade deficit with China narrowed to a seasonally adjusted $23.92 billion in October after widening to $24.12 billion in September. Exports advanced 10.1% (1.6% y/y) in October on top of a 13.5% September jump and imports rose 2.9% (-6.4% y/y) after an 8.5% rise; both posted the third m/m increase in four months. The goods trade deficit with the European Union widened to $19.18 billion in October, the largest since October 2022, after narrowing to $16.76 billion in September, with exports falling 2.1% (+0.7% y/y) and imports rising 3.8% (-5.4% y/y). The trade shortfall with Japan fell to $6.56 billion in October after widening to $6.88 billion in the previous month, reflecting declines of 2.6% (+0.8% y/y) in exports and 3.6% (+3.3% y/y) in imports. As shown in the area chart, the trade deficit with China was the largest among the three trading partners.
The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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