The U.S. international trade deficit rose to a nine-month high in October as exports declined slightly and business and consumer spending drove imports sharply higher.
The Commerce Department reported on Tuesday that the trade gap increased 8.6 percent to $48.7 billion from September's $44.9 billion, easily topping the median estimate of $47.5 billion. Imports rose 1.6 percent, $3.8 billion, to $244.6 billion and exports slipped a bit under 0.1 $ billion, less than 0.1 percent, to $195.5 billion.
The gain in imports was largely due to a higher volume of goods, $3.5 billion while services added $0.3 billion. Industrial supplies and materials rose $12.8 billion as general goods added $1.1 billion and consumer items jumped $0.8 billion.
Consumer optimism in the United States is likely responsible for the surge in imports as retailers and wholesalers prepare for the holiday shopping season. Cell phone imports accounted for $303 million of the $800 million in consumer import growth backed by imports of applicances, toys, furniture and clothing.
Record imports from China, up to $31.9 billion from $29.9 billion and Mexico, to $6 billion from $5.1 billion, led to higher deficits with both countries.
Since the dramatic increase of the trade deficit in the late 1990's the U.S. has normally run a deficit in goods and a smaller surplus in services.
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U.S. International Trade Balance