US trade deficit narrows in October as exports rebound

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US trade deficit narrows to $67.1 billion in October, lowest in six months since hitting record high in September

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Washington: The US trade deficit narrowed to $67.1 billion in October, the lowest in six months since hitting a record high in September. A large rebound in exports helped offset a much smaller increase in imports.

The Commerce Department reported Tuesday that the October deficit was down 17.6% from September’s all-time peak of $81.4 billion. It was the smallest monthly loss since the rebalancing of $66.2 billion in April.

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The strong rebound in exports is seen by economists as evidence of global supply chains unraveling, and they believe smaller losses in the quarter could provide a solid boost to overall US economic growth.

There were gains in several export categories, indicating that the recovery in the global economy is beginning to boost demand for US products. Americans’ demand for imports was outpaced by export sales as the US economy recovered from the pandemic more quickly than other countries.

In October, exports rose 8.1% to $223.6 billion, while imports rose 0.9% to $290.7 billion. The deficit is the difference between what the United States exports to the rest of the world and what is imported from abroad.

The politically sensitive trade deficit with China, the largest with any country, fell 14% in October to $31.4 billion. In the first 10 months of this year, the deficit in trade of goods with China is running 13.7 percent more than a year ago.

America’s overall deficit The trade deficit totaled $705.2 billion so far this year, up 29.7% from the same period a year ago. Trade flows were cut sharply last year as the COVID pandemic restricted economic activity.

Part of the October increase in exports reflects an increase in oil exports, reflecting a return to more normal operations at Gulf Coast refineries that were shut down by Hurricane Ida.

The big gains in US auto exports and imports explains why the global computer chip shortage that began to curtail auto production, a trend that has been noted by leaders in the auto industry.

Andrew Hunter, senior US economist at Capital Economics, has predicted that an improvement in the business picture will boost US economic growth by about 1 per cent in the current October-December quarter. He expects GDP to expand at an annualized rate of 6.5% this quarter, a significant improvement from the modest 2.1% growth rate in the third quarter.

While the trade report offered evidence that supply chain problems were easing, Hunter said the number of waiting ships anchored from US ports had declined in recent weeks, but at “historically high levels”. have remained.

He also cautioned that the emergence of the new Omicron version and the travel restrictions that have been reimposed could reduce service business in the coming months.

Tuesday’s report showed the deficit in goods totaled $83.9 billion in October, while the US surplus in the services trade, which includes airline and other travel payments, totaled $16.8 billion.

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