October’s deficit was 17.6% lower than the all-time high of $ 81.4 billion reached in September, the Commerce Department said on Tuesday.
The United States’ trade deficit narrowed to $ 67.1 billion in October, the lowest in six months, after hitting a record high in September. A strong rebound in exports helped offset a much smaller increase in imports.
October’s deficit was 17.6% lower than the all-time high of $ 81.4 billion reached in September, the Commerce Department reported on Tuesday. This is the smallest monthly deficit since an imbalance of $ 66.2 billion in April.
The strong rebound in exports is seen by economists as evidence that global supply chains are starting to unravel, and they believe lower deficits this quarter could give a solid boost to overall economic growth in the United States. United.
There have been gains in many export categories, suggesting that a recovery in the global economy is starting to stimulate demand for American products. U.S. import demand had outpaced export sales, as the U.S. economy recovered faster than other countries after the pandemic.
In October, exports rose 8.1% to $ 223.6 billion while imports rose 0.9% to $ 290.7 billion. The deficit is the gap between what the United States exports to the rest of the world and the imports it purchases from foreign countries.
The politically sensitive trade deficit with China, the largest of any country, fell 14% in October to $ 31.4 billion. For the first 10 months of this year, the merchandise trade deficit with China is 13.7% higher than a year ago.
The overall United States trade deficit has totaled $ 705.2 billion so far this year, up 29.7% from the same period a year ago. Trade flows were sharply reduced last year as the COVID pandemic restricted economic activity.
Part of the increase in October’s exports reflected a sharp increase in oil exports, showing a return to more normal operations at Gulf Coast refineries that had been closed by Hurricane Ida.
Large gains in U.S. auto exports and imports suggest that the global computer chip shortage that had crippled auto production is starting to ease, a trend that has been noted by auto industry executives.
Andrew Hunter, senior US economist at Capital Economics, predicted that an improvement in the business situation would add about 1 percentage point to US economic growth in the current quarter from October to December. He expects gross domestic product to grow at an annual rate of 6.5% this quarter, a significant improvement from the modest growth rate of 2.1% in the third quarter.
As the trade report offered evidence that supply chain problems are easing, Hunter noted that while the number of waiting ships anchored off U.S. ports has declined in recent weeks, they remain at “low levels”. historically high “.
He also warned that the emergence of the new Omicron variant of the coronavirus and the travel restrictions that have been reinstated could dampen trade in services in the coming months.
Tuesday’s report showed the goods deficit stood at $ 83.9 billion in October while the U.S. surplus in services trade, which includes airline payments and other travel, stood at $ 16.8 billion.