RTTN: U.S. Trade Deficit Narrows To Lowest Level Since January
(RTTNews) - With U.S. exports showing a substantial increase in the month of October, the Commerce Department released a report on Friday showing that the U.S. trade deficit for the month unexpectedly narrowed to show the smallest deficit since January.
The report showed that the trade deficit narrowed to $38.7 billion in October from a revised $44.6 billion in September. Economists had expected the deficit to widen to $44.5 billion from the $44.0 billion originally reported for the previous month.
A jump in exports contributed to the narrower deficit, with the value of exports surging up by 3.2 percent to $158.7 billion in October from $153.8 billion in September.
The sharp rise in the value of exports was largely due to a 4.2 percent increase in exports of goods, with exports of industrial supplies and materials showing a substantial increase. Exports of services increased by a more modest 0.9 percent.
The narrower trade deficit also reflected a modest decrease in the value of imports, which edged down by 0.5 percent to $197.4 billion in October from $198.4 in September. A drop in the value of crude oil imports contributed to the decrease in imports.
Peter Boockvar, equity strategist at Miller Tabak, noted that the much narrower than expected trade deficit may raise fourth quarter GDP estimates by 0.4 to 0.5 percentage points.
The report also showed that the politically sensitive trade deficit with China narrowed to $25.5 billion in October from $27.8 billion in September.
In other trade-related news, the Labor Department released a separate report showing that U.S. import prices saw a notable increase in the month of November, with the increase largely due to substantial fuel import price growth. Export prices also saw a significant increase during the month.
The Labor Department said import prices rose 1.3 percent in November following a 1.0 percent increase in October. Excluding a 3.7 percent jump in fuel import prices, import prices increased by a more modest 0.8 percent compared to a 0.3 percent increase in the previous month.
Additionally, the report showed that export prices surged up by 1.5 percent in November after rising by 0.8 percent in the previous month. Export prices rose by a more modest 0.8 percent excluding a 8.0 percent surge in prices for agricultural exports.
