The U.S. trade deficit widened by $2.3 billion in October to $11.6 billion, the greatest imbalance in nearly three years, the Commerce Department reported Tuesday.
October's deficit was the greatest since a $12.5 billion imbalance in February 1988, the government said. For the first 10 months of the year, the deficit has grown at an annual rate of $103 billion.Imports in October were $5.0 billion more than September imports of $41.3 billion. Exports during the month were $2.8 billion more than September exports of $32.0 billion.
The September to October boost in exports reflected increases in sales of industrial supplies and materials, automobiles, capital goods and consumer goods, the government said.
Commerce Secretary Robert Mosbacher said U.S. exports and imports reached record highs, with exports remaining "the strongest engine of U.S. economic growth."
"Import demand was stronger than expected by observers who thought the U.S. economy was very weak in October," he added.
But Hugh Johnson, chief economist at First Albany Bank, of Albany, N. Y., said the October trade report, the first indication of fourth-quarter trade activity, "suggests the economy is declining rather rapidly."
"It suggests we need to nudge downward our forecast for real gross national product," Johnson said. "You can try to explain away (the deficit) by petroleum numbers, but it is still a large deficit and adds to our problems."
The monthly change in imports was fueled by trade in automobiles and oil, accounting for $2 billion of the difference between September and October, the government said.
Imports of petroleum rose $1 billion to $7.2 billion in October, the largest value of oil imports since April 1981, when oil imports totalled $7.4 billion, the government said.
Exports of manufactured goods totaled $26.8 billion, up $2.8 billion from September. Most of the increase came from automobiles, power generating machinery, non-monetary gold, vehicle parts, industrial machinery and electrical machinery.