Trade Deficit Rises In October

Date: December 07, 2015

Exports, Imports Both Down As Foreign Demand Lowers

According to the latest data from the Commerce Department, in October the US trade deficit increased by 3.4% to a total of $43.9 billion, up from September’s $42.5 billion total. Exports fell by 1.4% while imports declined by 0.6%. October exports reached a total of $184.1 billion, $2.7 billion less than in September. Meanwhile, October imports were $228.0 billion, $1.3 billion less than for the previous month. Economists had expected the deficit to decline to $40.5 billion, according to the Wall Street Journal. Barclays economist Jesse Hurwitz wrote in a note to investors that ongoing weakness in demand from abroad and the strong dollar portend that net exports will continue to be a drag on GDP growth for at least several more quarters. Bloomberg News said the gap “unexpectedly widened” because softening demand for US goods and services “outweighed a cooling in imports.” The AP said exports hit their lowest level in over four years, reflecting “the impact of a weak global economy and stronger dollar.” The US trade deficit with Mexico was up 10.2% to $33 billion, the widest gap between the two neighbors in over three years. The same $33 billion figure applied to October’s trade gap between the US and China, although that number reflected a 9.1% decline from September.

What This Means For Small Businesses

News of an increase in the trade deficit in October, following months of trade deficit declines, makes the overall health of the US economy a bit less certain. US exporters continue to face challenges like a strengthening US dollar and weaker foreign demand that mean small businesses are likely to keep facing hurdles in their efforts to sell to oversees markets.

Additional Reading

Reuters also reported on the trade data.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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