US trade deficit widens on greater imports, drop in exports

The US trade deficit widened for a second month in October, as the value of imports increased and exports declined, which may weigh on economic growth in the fourth quarter.

The trade gap in goods and services grew by $4 billion, or 5.4%, to $78.2 billion from a month earlier, Commerce Department data showed Tuesday. The figures aren’t adjusted for inflation. The median estimate in a Bloomberg survey of economists called for a widening to $80 billion.

The value of goods and services imports rose 0.6% to $334.8 billion, while exports declined 0.7% to $256.6 billion, according to the government.

The widening of the deficit in October — which expanded to the greatest margin since June — suggests a much more muted impact from trade on fourth-quarter gross domestic product after contributing the most since 1980 in the prior quarter.

Meanwhile, foreign demand for US goods and services remains soft as many economies contend with persistent inflation and rising interest rates. And even though the dollar has erased much of its advance this year in recent months, a strong currency is still making making US goods more expensive for overseas customers. 

On an inflation-adjusted basis, the October merchandise trade deficit increased to $112.6 billion, also the widest in four months.

Digging Deeper

• The nominal merchandise-trade deficit grew 6.5% to nearly $100 billion
• Travel exports — or spending by visitors to the US — increased in October by the most since April
• Travel imports, a measure of Americans traveling abroad, rose to a fresh record high
• The US merchandise-trade deficit with China narrowed to the smallest since July 2021