US trade deficit widens despite rising exports

The US trade deficit widened slightly more than expected in September as rising exports of goods and services were offset by a jump in imports.

The Commerce Department said on Friday the trade gap increased 1.7 per cent to $43.5 billion. August’s trade deficit was revised up to $42.8 billion from the previously reported $42.4 billion, reports Reuters.

Economists polled by Reuters had forecast the trade shortfall rising to $43.2 billion in September. When adjusted for inflation, the trade deficit was little changed at $62.2 billion.

Trade added 0.41 percentage points to the economy’s 3.0 per cent annualised growth rate in the third quarter. It was the third straight quarterly contribution to gross domestic product.

The department said while it could not isolate the impact of hurricanes Harvey, Irma and Maria on the trade data, the effects were “embedded in source data.”

In September, exports of goods and services increased 1.1 per cent to $196.8 billion, the highest level since December 2014.

Goods exports were also the highest since December 2014, while exports of services hit a record high.

There were increases in exports of industrial supplies and materials. Exports of consumer goods, however, declined. Exports to China fell 1.1 per cent.

Imports of goods and services increased 1.2 per cent to $240.3 billion in September. Food imports were the highest on record as were those of capital goods.

Imports of non-petroleum imports were the highest since March 2015.

Imports of goods from China slipped 0.8 per cent. As a result, the politically sensitive US-China trade deficit fell 0.7 per cent to $34.6 billion in September.