The US trade deficit widened in October 2017 to its highest value since January. The record import reflects strong domestic demand, according to data from the Ministry of Commerce. The deficit widened 8.6% yoy to 48.7 billion USD from 44.9 billion USD in September.
The imports rose by 1.6% to 244.6 billion USD, mostly supported by products such as mobile phones, clothing, household goods and services. The exports remain unchanged at 195.9 billion USD, with oil supplies overshadowed by a drop in capital and consumer goods exports.
The growth in imports is likely to reflect traders’ preparations for the Christmas shopping season. The imports of consumer goods grew by nearly 800 million USD, with a 303 million USD increase in mobile phones and other household goods.
If the trade deficit persists, it may exacerbate economic growth in the fourth quarter. Over the period July-September 2017, the net exports added 0.43 percentage points to GDP growth.
The stable consumption and the acceleration of business investment will continue to generate demand for imported goods. At the same time, the exports of US products can improve with the improvement of overseas economies.
The details from the Ministry of Trade report also show that imports from China are at a record high level and contribute to the widening of the deficit. The deliveries from Mexico are also at their highest level.