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October imports a record $244.6B

Trade gap biggest since January; deficit up 11.9% in year

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Photographs by AP

Cranes sit idle at the Port of Baltimore in late 2016. The U.S. trade deficit widened in October to a nine-month high on record imports that reflect steady domestic demand, the Commerce Department reported Tuesday.

WASHINGTON -- Record imports lifted the U.S. trade deficit to $48.7 billion in October, highest since January.

The Commerce Department said Tuesday that the trade gap rose 8.6 percent in October from $44.9 billion in September. Imports hit a record $244.6 billion in October, and exports were unchanged at $195.9 billion.

A trade deficit means that the United States is buying more goods and services from other countries than it is selling to them. A rising trade gap reduces U.S. economic growth.

President Donald Trump views America's huge trade deficits as a sign of economic weakness. He blames them on bad trade deals and abusive practices by China and other trade partners. Conventional economists argue that trade deficits are largely caused not by flawed trade agreements or cheating by particular countries but by a bigger economic force: Americans spend more than they produce, and imports have to fill in the gap.

So far this year, the United States is running a trade deficit of $462.9 billion, up 11.9 percent from a year earlier. U.S. exports are up 5.3 percent this year; a weaker dollar has made U.S. goods less expensive overseas. Imports were up 6.5 percent the first 10 months of 2017.

The politically sensitive trade deficit in goods with China rose 1.7 percent to $35.2 billion from September to October and is up 7 percent this year to $309 billion.

In October, the United States ran a surplus of $20.3 billion with the rest of the world in services such as banking and tourism. But that was overwhelmed by a $69.1 billion deficit in the trade of goods.

Crude oil imports were up $1.5 billion in October. Imports of drilling and oilfield equipment climbed by $304 million, and imports of cellphones and other household goods, jumped.

Part of the surge in imports probably reflected merchants preparing for the Christmas shopping season. Consumer goods imports increased almost $800 million, including a $303 million gain in cellphones and other household goods, as well as more inbound shipments of furniture, appliances, toys and clothing.

The shortfall in merchandise trade, if sustained, may weigh on economic growth in the fourth quarter after net exports added 0.43 percentage point to gross domestic product in the previous three-month period.

Steady consumer spending and a pickup in business investment would continue to drive demand for imports. At the same time, sales of American-made merchandise could improve as economies in the rest of the world advance.

Exports and imports of goods accounted for about three-fourths of America's total trade in 2016; the U.S. typically runs a deficit in merchandise trade and a surplus in services.

Information for this article was contributed by Bloomberg News.

Business on 12/06/2017

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