The U.S. trade deficit increased $1.9 billion in a month, according to an analysis done by the Department of Commerce, which could mean many families will see the worth of their savings drop.
A trade deficit is created when a country imports more goods than it exports. This year, U.S. exports declined 3.6 percent. This means the fewest goods were shipped out of America this year since January 2009.
Growing trade deficits can affect consumers by changing the value of the dollar, according to an article by Daily Reckoning.
As the deficit gap increased by 4.9 percent, Addison Wiggin, writer for the Daily Reckoning, explained what this means for the dollar.
"America has a lot of wealth, but that wealth is being consumed very quickly," Wiggin said in his article. "History shows that no matter how rich you are, you can lose that wealth if you’re not productive. Meanwhile, the dollar’s value falls and — in spite of the Fed’s view that this is a good thing — it means our savings are worth less. Your spending power falls when the dollar falls, and as this continues, the consequences will be sobering."
Using more goods than it produces, the U.S.'s largest trade deficit is with China, where it's $261.5 billion in debt. The other top five countries are Japan, Germany, Mexico and Saudi Arabia, according to the Census Bureau.
China's trade gap with the U.S. stretched to the largest on record in October.
One of the suggested reasons for this slump is Superstorm Sandy and the closed New Jersey ports, according to an article by Bloomberg.
Also, the cost of soybeans dropped, which Bloomberg suspects came from the Midwest drought. Cooling economies in Europe and Asia could be taking their toll on exporting as well.
Wiggen suggests another cause for the growing gap.
"The steep decline in personal saving is a symptom of our spending, and along with that habit we have lower capital investment and a growing federal budget deficit," Wiggen said.