The trade deficit in the U.S. widened in October as the biggest slump in exports in almost four years outweighed a drop in imports, evidence of the slowdown in global growth.
The trade gap grew 4.9% to $42.2 billion from a revised $40.3 billion U.S. in September that was smaller than previously estimated, the Commerce Department reported today in Washington. The median forecast in a survey of 70 economists called for the deficit to expand to $42.7 billion U.S. Exports declined 3.6%, the most since January 2009.
The decrease in exports, which may have been exacerbated by the drought in the Midwest that caused sales of soybeans to plunge, was nonetheless broad-based, indicating cooling economies from Europe to Asia may be sapping demand for American goods, once a mainstay of the economic recovery. The slowdown in imports, which affected everything from electronics to clothing and chemicals, may also be signaling slower U.S. growth.
Survey estimates for the trade gap ranged from $40 billion to $44.6 billion U.S. The Commerce Department revised the deficit for September to an almost two-year low from an initially reported $41.5 billion U.S.
The value of exports dropped to $180.5 billion U.S., the lowest since February, from $187.3 billion, today’s report showed. Overseas sales of soybeans slumped by $1.13 billion U.S. during the month, and aircraft demand, which is also often volatile, decreased by $1.02 billion U.S. Foreign purchases of engines, industrial machinery, petroleum products were among the other categories that also saw decreases.
Superstorm Sandy, which closed ports in New Jersey in late October and early November, may have been one reason the shipment of U.S. goods decreased.