October trade deficit drops to $32.9 billion
WASHINGTON — The U.S. trade deficit unexpectedly narrowed in October as exports surged to the highest level in nearly a year. Growing exports, boosted by a weaker dollar, are expected to boost demand for American manufactured goods in coming months and provide important strength to the overall economic recovery.
The Commerce Department said today the trade deficit fell to $32.9 billion in October, 7.6 percent below a revised September deficit of $35.7 billion. Economists had expected the deficit to increase to $36.8 billion.
The improvement reflected a 2.5 percent jump in exports, led by strong gains in sales of American farm products, autos, aircraft and industrial machinery. Imports rose a smaller 0.4 percent, a gain that was held back by a big drop in oil imports.
The politically sensitive deficit with China rose 2.5 percent to $22.7 billion, the highest level in nearly a year, even though U.S. exports to China hit an all-time high.
In a trip to China last month, President Barack Obama lobbied Chinese leaders to do more to ease trade tensions between the two nations by allowing the Chinese currency to rise in value against the dollar. American manufacturers contend the Chinese are manipulating their currency to gain unfair trade advantages. A weak yuan makes American goods more expensive in China and Chinese goods cheaper for American consumers.
