The US trade deficit slightly narrowed in October to a deficit of $43.5 billion in line with expectations, following from the previous month’s $44.2 billion gap. This is the lowest trade gap in ten months.
A break down of the data shows that both U.S. imports and exports declined in October, in a possible sign of weakening demand in the United States and abroad.
Imports fell 1.0 percent to $222.6 billion, led by a $3.6 billion drop in industrial supplies and materials. The average price for imported oil fell for a fifth consecutive month to $98.84 per barrel, from its May peak of $108.70. Despite the overall import decline, imports of capital goods and food, feeds and beverages increased to records in October.
Exports fell 2.2 percent to $179.2 billion, the second- highest on record, reflecting a drop in gold shipments after they surged in September. Overseas sales of capital goods, including drilling equipment and generators, climbed to a record, as did foreign purchases of petroleum products. But exports to China and South and Central America reached records.
Meanwhile, Canada, which is a major trading partner of the US, also posted a surprise trade deficit in October.
Statistics Canada reported that Canada posted a C$885 million ($868 million) trade deficit in October after a revised C$1.03 billion surplus in September due to a drop in exports in both price and volume in most sectors. Also, imports reached a record high of $39.26 billion, with machinery and equipment, as well as energy products and automotive products, leading the rise.
The Canadian dollar fell against its US counterpart after the release of both the US and Canadian trade data simultaneously. USDCAD rose to 1.0252 from 1.0187 where it was before the news.