U.S. Trade Deficit Deepens as Imports Surge

The U.S. trade deficit in goods and services increased to $42.6 billion during October from $36.2 billion in September, revised $36.4 billion. The Action Economics Forecast Survey expected a $42.0 billion deficit. Total imports strengthened 1.3% (0.8% y/y) during October and recouped a 1.2% drop, as both oil & non-oil imports increased. Exports declined 1.8% (+0.4% y/y) following two months 0.9% increase.

Imports of goods increased 1.5% (0.2% y/y) following a 1.0% decline. Petroleum product imports jumped 3.4% (12.1% y/y), as the price per barrel of crude oil rose to $40.0, the highest level in three months. The quantity of energy-related petroleum product imports declined 3.3% (+9.8% y/y). Nonpetroleum goods also were strong and posted a 1.3% rebound (-0.4% y/y) following a 1.0% drop. Among major categories, capital goods rebounded 2.2% (-0.6% y/y) and reversed most of their 3.3% September drop. Nonauto consumer goods imports jumped 5.0% (-2.5% y/y) following three months of substantial decline, and industrial supplies & materials imports eased 0.9% (+4.2% y/y).  Foods, feeds & beverage imports ticked 0.2% higher 6.1% y/y) while autos & parts imports declined 2.2% (-0.2% y/y). Other goods imports jumped 2.2% (-0.6% y/y). Services imports increased 0.5% (3.4% y/y) following a 2 .0% decline. Travel imports rose 0.2% (7.3% y/y) and transport imports gained 2 .4% (4.1% y/y).

Exports of goods declined 2.8% (-0.1% y/y) after a 1.1% increase. Foods, feeds & beverage exports were down 11.1% (+11.9% y/y). Nonauto consumer goods exports declined 5.4% (-3.4% y/y) and reversed a 4.6% rise. Auto exports eased 0.3% (-1.9% y/y). Capital goods exports were little changed (-1.3% y/y); industrial supplies & materials exports fell 3.0% (+1.1% y/y) and other goods exports rose 2.4% (2.9% y/y). Services exports rose 0.2% (1.5% y/y) after their 0.7% increase in September. Travel exports declined 0.7% (+3.6% y/y) and transport exports gained 1 .6% (-3.7% y/y).

By country, the trade deficit with China improved to $31.1 billion in October from $32.5 in the month before. U.S. exports to China gained 32.8% m/m (11.3% y/y), while imports increased 4.2% (-1.2% y/y). The trade deficit with Japan deepened to $5.9 billion from $4.8 billion. Exports rose 3.5% (10.9% y/y), while imports rebounded 12.5% (8.2% y/y). The trade deficit with the European Union (EU-28) deepened to $13.1 billion from $10.2 billion, as exports declined 1.1% (-5.5% y/y) and imports increased 8.1% (-4.6% y/y). These country data are not seasonally adjusted.

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.