The trade picture brightened slightly for the United States in October as the trade deficit for goods and services fell to $40.6 billion, down from the revised $43 billion in September. October exports were up $3.4 billion from the September total of $189.3 billion, while October imports increased by $1 billion to $233.3 billion.
The $192.7 billion in exports of goods and services was a record, prompting Export-Import Bank Chairman and President Fred Hochberg to claim “as another record month for American exporters and American jobs shows the ‘Made in America’ brand remains a top seller.”
But economist Alan Tonelson of the U.S. Business and Industry Council, representing small-to-mid-size manufacturers, said the trade deficit continued to be a serious drag on the economy.
“At its $40 billion-plus recent average levels, the trade deficit continues to deprive the U.S. economy of much more demand each month than January’s tax increases ($15.8 billion monthly) and sequester spending cuts ($12.1 billion) combined. Even worse, virtually all of this trade damage comes in the economy’s private sector,” he stated.
The goods deficit narrowed by $2.2 billion to $60.2 billion in October. Exports of goods increased $3 billion to $135.3 billion. The nation also imported more goods, up $0.8 billion to $195.5 billion in October.
Export increases in goods in October included industrial supplies and materials ($1.5 billion); consumer goods ($1 billion); food and beverages ($0.6 billion); capital goods ($0.3 billion) and other goods ($0.2 billion). Exports of automotive vehicles and parts fell by $0.2 billion.
Through October, the trade deficit for goods stood at $594 billion, down just under 4% from the $619.4 billion for the corresponding period of 2012. Exports are up $19.3 billion to $1.32 trillion, while imports have fallen just over $6 billion to $1.9 trillion.
The U.S. trade deficit in goods with China fell slightly in October, to $28.9 billion from $30.5 billion in September. U.S. trade deficits also narrowed in October for Canada and Mexico, to $2.98 billion and $4.1 billion respectively.
The U.S. continued to run a deficit in trade of advanced technology products, increasing to $9.8 billion in October from $8.1 billion in September.
The trade numbers present more evidence for growth in the fourth quarter, said Michael Dolega, a senior economist with TD Economics. “The October surge in exports to its record high, taken together with a solid new exports sub-index reading from Monday’s ISM manufacturing report, should lend support to growth in an otherwise lackluster quarter dented by the federal government shutdown.”