The U.S. trade deficit rose in October at a time when the deficit with one of its largest trading partner, China, and consumption reached record levels and rising fuel costs.
U.S. goods and services deficit in international trade rose 4.9% to $ 42.24 billion from $ 40.28 in the previous month, the Commerce Department reported Tuesday. The trade deficit in September was revised down to $ 40.28 billion.
The report on margin undermine Wall Street expectations, with economists in a Dow Jones Newswires survey predicted a deficit of $ 42.1 billion.
Deisit trade with China rose 1.4% to a record $ 29.5 billion in October. Although exports jumped 23%, or $ 20.3 billion to $ 10.82 billion, imports increased by $ 2.44 billion, or 6.5%, to $ 40.29 billion. The news will likely continue to push the political opposition against the Chinese in the U.S. economic recovery.
The deficit with Japan rose 45%, or $ 2.2 billion, to $ 7.0 billion as imports surged and exports shrank.
Meanwhile, Tuesday’s report showed that the average price of imported crude oil rose $ 0.87 to $ 99.75 per barrel in October. Tabulation of overall imports of crude oil amounted to $ 25.9 billion, up from $ 24.4 billion in the previous month as consumption rose more than 5%. The U.S. paid $ 33.17 billion for all types of petroleum-related imports, up from $ 31.57 billion in September.
Reports on Tuesday indicated that the real deficit, or adjusted for inflation, which economists use to measure the impact of trade on GDP, slightly narrowed to $ 46.17 billion in October from $ 46.62 billion the previous month.
U.S. exports shrank 3.6% to $ 180.51 billion, surpassing the 2.1% decline in imports to $ 222.75 billion.
Although the debt-laden euro area and the financial crisis, the deficit with the region increased by more than 16%, or $ 1.24 billion to $ 88.7 billion.