US trade deficit widened in October on weak exports

Stacked containers are shown as ships unload their cargo at the Port of Los Angeles in Los Angeles, California, U.S. Nov 22, 2021. REUTERS/Mike Blake/File photo

WASHINGTON  – The U.S. trade deficit widened more than expected in October as exports declined, likely positioning trade to be a drag on economic growth in the fourth quarter.

The trade deficit increased 5.1 percent to $64.3 billion, the Commerce Department’s Census Bureau said on Wednesday. Data for September was revised to show the trade gap rising to $61.2 billion instead of $61.5 billion as previously reported.

Economists polled by Reuters had forecast the trade deficit increasing to $64.2 billion in October.

Exports of goods and services fell 1 percent to $258.8 billion. Goods exports decreased 1.8 percent to $173.5 billion. Consumer goods exports decreased $2.1 billion, led by gem diamonds and pharmaceutical products. Exports of motor vehicles, parts and engines decreased $0.9 billion.

But exports of industrial supplies and materials increased $1.2 billion. At $51.2 billion, capital goods exports were the highest on record. Exports of services rose $0.6 billion to $85.3 billion, lifted by transport, financial and other business services. But travel services exports fell.

Imports of goods and services gained 0.2 percent to $323.0 billion. Goods imports edged up 0.1 percent to $263.3 billion, potentially flagging softening domestic demand amid higher interest rates.

Capital goods imports increased $1.8 billion amid rises in computers, drilling and oilfield equipment. Imports of motor

vehicles, parts and engines fell $1.0 billion.

Imports of services increased $0.2 billion to $59.8 billion, supported by a rise in travel.

Trade was neutral to the economy’s 5.2 percent annualized growth rate in the third quarter. Growth estimates for the fourth quarter are mostly below a 2- percent pace.