WASHINGTON: The US trade deficit widened sharply in October as exports weakened following a summer surge, and imports jumped, setting up a likely drag on overall economic growth in the final months of 2016.
The trade gap for goods and services surged 17.8% from a month earlier to a seasonally adjusted $42.6 billion in October, the Commerce Department said Tuesday. That was the steepest one-month rise since March 2015, and took the deficit to its highest level since June. Economists had expected an October trade gap of $42.1 billion.
Looking ahead, “I would expect the trade deficit to widen next year, as solid domestic demand will boost imports and a renewed appreciation in the dollar will limit the strength in exports,” Amherst Pierpont Securities chief economist Stephen Stanley said in a note to clients.
