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Trade Gap Hits $80.9 Billion, Another Record Height, as Exports Slump

Nov. 4, 2021
Imports of industrial supplies and materials increased $1 billion while exports for the same category of goods fell $5.7 billion.

The gap between U.S. exports and imports grew 11.2% last month, according to the latest government data. The U.S. trade deficit hit $80.9 billion in September, up $8.1 billion from August, setting a new all-time high for the second month in a row. Imports increased slightly while exports fell as supply chain concerns continue to hamstring manufacturers.

The data, released by the Census Bureau and the U.S. Department of Commerce, points to intense demand in the U.S. for industrial supplies and materials as well as capital goods like electronic equipment. Goods exports fell by $7.1 billion to $142.7 billion last month, mostly thanks to fewer industrial supplies and materials exports, which fell $5.7 billion. Exports of nonmonetary gold fell $1.9 billion while trade of U.S. crude oil, petroleum products, and other precious metals all fell about $1 billion each.

At the same time, imports of industrial supplies and materials increased by $1.0 billion, with a notable increase in organic chemicals imports, which rose $0.9 billion by itself.

A similar trend is visible in the capital goods sector. Exports fell $1.6 billion there as the U.S. shipped fewer semiconductors and civilian aircraft engines. Capital goods imports grew by $2.5 billion thanks to U.S. demand for computers, which rose by $1.2 billion, and electrical apparatuses, which rose by half a billion dollars.

That trend was flipped in one category: pharmaceutical preparations. Counted as a consumer good, imports of drugs meant for human or veterinary consumption fell $1.3 billion while exports of the same good rose by $1.5 billion, contributing to a $0.7 billion increase in consumer goods exports.

In the automotive sector, imports of vehicles, parts and engines tumbled substantially by $2.2 billion. $1.7 billion of that came from fewer passenger vehicle imports.

The overall trade gap is calculated with a combination of the separate goods and services gaps. In September, the goods deficit rose $8.9 billion to $98.2 billion while the services gap grew $0.8 billion to $17.2 billion.

The United States’ deficits with China and Mexico increased, while its trade deficit with Japan shrank. The U.S.-China trade gap grew $3.4 billion to $31.5 billion driven by $3.2 billion more in imports, and the U.S.-Mexico gap grew $2.3 billion to $8.8 billion as exports to the neighboring country fell $1.7 billion.

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