Export Shrinks! America's Commodity Trade Deficit Hit Another Record High In October

The U.S. dollar index rose, exports fell and retail and wholesaler inventories increased. The U.S. trade deficit continued to rise in October, setting a new record.

Preliminary data released by the U.S. Department of Commerce on Wednesday showed that the U.S. commodity trade deficit expanded to a new monthly record. In October, the commodity trade account reached an all-time high of $77.2 billion, with an expected value of $77 billion. The pre-value was revised from $76 billion to $76.3 billion. Among them, retail inventory increased by 0.9%, wholesale inventory increased by 0.7%, all exceeding expectations.

Imports rose by 0.1% in October, from $217.554 billion in September to $217.764 billion, while exports fell by 0.6% in October, from $141.303 billion in September to $140.517 billion.

From the election of U.S. President Trump to October 2018, the U.S. commodity trade deficit rose sharply in one month, expanding by nearly $14 billion. In December 2016, the U.S. commodity trade deficit was $63.485 billion.

On the one hand, Global trade frictions also have a greater impact on U.S. exports. As can be seen from the above chart, in the months following the trade war launched by Trump, the United States commodity trade deficit in one month expanded sharply, exceeding $10 billion.

Another reason for the expansion of the U.S. trade deficit is that the continuous rise of the U.S. dollar index has led to the loss of price competitiveness of U.S. goods and the blow to exports. The U.S. dollar index rose above 97 in October, with a peak of 97.13 in October. It rose more than 2% in the month and is currently at 97.39.

Economists generally believe that the unilateral protectionist policy of the United States can not reduce the trade deficit. On the contrary, with the expansion of the US fiscal deficit, the decline of private savings, the rise of interest rates and the US dollar exchange rate, the US trade deficit will continue to expand.

According to Xinhua, Maurice O'Busterfield, chief economist of the International Monetary Fund, said last month that the U.S. attempt to reduce its trade deficit by imposing tariffs was misguided, which would not help solve the trade imbalance, but would exacerbate trade tensions and drag down world economic growth.


News from Knowledge of Wall Street.