The U.S. trade deficit widened sharply in October as slowing global demand and a strong dollar pushed goods exports to a seven-month low, suggesting that trade could be drag on economic growth this quarter if the trend persists, APA reports citing Reuters.
The trade deficit increased 5.4% to $78.2 billion, the Commerce Department said on Tuesday. The second straight monthly widening in the trade gap was partly driven by a shift in pharmaceutical products trade, with exports of these goods falling sharply and imports surging.
"Trade in pharmaceuticals was always notoriously volatile, and it's only gotten worse with the big international shipments in both directions of COVID vaccines," said Paul Ashworth, chief North America economist at Capital Economics in Toronto.
Exports fell 0.7% to $256.6 billion, with goods shipments dropping 2.1% to $176.0 billion, the lowest level since March. There were decreases in exports of industrial supplies, which largely reflected natural gas and other petroleum products. Crude oil exports, however, increased $1.6 billion.