The trade deficit was little changed in October as an improving U.S. economy caused imports to climb to a record while exports also rose.
The gap narrowed by 0.4% to $43.4 billion from the prior month’s revised $43.6 billion, Commerce Department figures showed in Washington. The median forecast in a Bloomberg News survey of 71 economists called for a narrowing to $41.2 billion.
Purchases of foreign-made capital goods such as computers and semiconductors were the highest ever, pointing to gains in business investment.
Weaker growth overseas is putting a limit on foreign demand for U.S. goods and services, signaling trade will provide less of a boost to the world’s largest economy. At the same time, a drop in American orders for petroleum from abroad is helping keep a lid on imports and a broadening in the trade gap.
“We’re going to see it widen in the quarters ahead, reflecting the impact of a stronger dollar and weak growth in the rest of the world,” Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida, said before the report. “The U.S. looks really good at this point -- a lot better than other places.”
Bloomberg survey estimates for the trade gap ranged from deficits of $39.3 billion to $44 billion. The Commerce Department initially reported a $43 billion shortfall for September.
Imports increased 0.9% to $241 billion from $238.8 billion the prior month. In addition to capital goods, purchases of foods, feeds and beverages were the highest ever, and demand for foreign autos and parts also surged.
The increase in imports was held back by a drop in demand for fuel. Purchases of petroleum dropped to the lowest level since November 2009.
Exports rose 1.2 to $197.5 billion from $195.2 billion in September. The increase was also led by record demand for capital goods as customers abroad bought more American-made aircraft, generators and industrial equipment.
After eliminating the influence of prices, which generates the numbers used to calculate gross domestic product, the trade deficit was little changed at $50.8 billion compared with $50.9 billion in September.
Figures released last week showed that less narrowing of the trade deficit than previously calculated offset some improvement elsewhere in economic growth in the third quarter.
Gross domestic product grew at a 3.9% annualized rate, with net exports accounting for 0.8 percentage points of the advance.
Similar contributions will be difficult to match in coming quarters as faster growth in the U.S. and slower growth among the country’s trading partners boosts imports and slows exports.