According to information provided by Reuters, the U.S. trade deficit narrowed in October as exports hit a record high. In a report, the U.S. Bureau of Economic Analysis said that the U.S. trade deficit narrowed to a seasonally adjusted USD40.6 billion in October from a deficit of USD43.0 billion in September, whose figure was revised from a previously reported deficit of USD41.8 billion.
An improving global economy is boosting demand for U.S. exports. In October, exports increased 1.8 percent to $192.7 billion. That was the highest on record and snapped three straight months of declines in exports. Petroleum exports were the highest on record in October. Exports to China hit a record high as did imports from that country. Though, the trade deficit with China narrowed in October. China has been one of the fastest-growing markets for U.S. goods, though the pace of export growth slowed in recent months. Exports to Canada and Mexico also reached all-time highs in October.
In October, U.S. exports to the European Union rose 1.5 percent. The U.S. trade deficit with the European Union hit a monthly record of $14.3 billion in October, reflecting a 21.5 percent jump in exports. While exports to the 27-nation European Union rose, they were outpaced by imports, resulting in a record trade deficit. Overall imports rose a modest 0.4 percent to $233.3 billion in October, the highest in 1-1/2 years. With consumer spending slowing significantly in the third quarter and stocks piling up in warehouses, businesses are probably wary of bringing in too many goods from overseas. The slowdown in import growth could limit the drag on the economy from an anticipated inventory drawdown in the fourth quarter.
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