US Trade Deficit Surges Near Five Year High Despite Sliding Dollar

Tyler Durden's picture

The US trade balance surprisingly blew out in October, increasing from $44.9 billion to $48.7 billion, as unexpectedly exports decreased and imports increased despite the ongoing dollar weakness, missing estimates of $47.5 billion. October's number was tied for the widest deficit going back to early 2012...

... and marks a stark divergence with the recent dollar weakness which would suggest an improvement in US trade data.  

Broken down by components, the goods deficit increased $3.8 billion in October to $69.1 billion. The services surplus decreased less than $0.1 billion in October to $20.3 billion.

Exports of goods and services decreased less than $0.1 billion, or less than 0.1 percent, in October to $195.9 billion. Exports of goods decreased $0.3 billion and exports of services increased $0.3 billion.

  • The decrease in exports of goods mostly reflected decreases in foods, feeds, and beverages ($1.3 billion) and in capital goods ($1.2 billion). An increase in industrial supplies and materials ($2.6 billion) partly offset the decreases.
  • The increase in exports of services mostly reflected increases in financial services ($0.1 billion) and in other business services ($0.1 billion), which includes research and development services; professional and management services; and technical, trade?related, and other services.

Imports of goods and services increased $3.8 billion, or 1.6 percent, in October to $244.6 billion. Imports of goods increased $3.5 billion and imports of services increased $0.3 billion.  

  • The increase in imports of goods mostly reflected increases in industrial supplies and materials ($1.8 billion), in other goods ($1.1 billion), and in consumer goods ($0.8 billion). 
  • The increase in imports of services mostly reflected an increase in transport ($0.3 billion).  

Broken down by region, the October figures show surpluses, in billions of dollars, with South and Central America ($3.9), Hong Kong ($2.3), Brazil ($1.1), Singapore ($0.7), Saudi Arabia ($0.3), and
United Kingdom ($0.2). Deficits were recorded, in billions of dollars, with China ($31.9), European Union ($12.0), Mexico ($6.0), Japan ($5.9), Germany ($5.3), Italy ($2.7), South Korea ($2.7), India ($2.1), Canada ($1.9), OPEC ($1.6), France ($1.6), and Taiwan ($1.6).

  • The deficit with China increased $2.1 billion to $31.9 billion in October. Exports decreased $0.8 billion to $10.6 billion and imports increased $1.2 billion to $42.5 billion.
  • The deficit with the European Union decreased $2.5 billion to $12.0 billion in October. Exports increased $1.4 billion to $25.0 billion and imports decreased $1.1 billion to $37.0 billion
  • The balance with members of OPEC shifted from a surplus of $0.6 billion to a deficit of $1.6 billion in October. Exports decreased $0.9 billion to $4.3 billion and imports increased $1.3 billion to $5.9 billion.

Needless to say, Trump who has repeatedly voiced his displeasure with the soaring US trade deficit, will not be happy, and may pressure the Fed to weaken the dollar even further to boost US exports.

As for the immediate impact on US economic data, expect this number to subtract approximately 0.3% from Q4 GDP, pushing the consensus estimate into the lower 2% range.

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lester1's picture

1. Tax cuts put more money in people's pockets.

2. People buy more crap made in China

3. Trade deficits widens

4. China wins!

MonetaryApostate's picture

Print more fake money...

Since 2009 alone the ultra wealthy running America have printed over $551 Trillion dollars, & can loan out 90x that!

https://plus.google.com/+GaleInnes/posts/UyD8aEnJAJB

Snaffew's picture

China won long ago...the US is just riding on its' bullshit international rep and its' military power.  The military is a fucking joke these days and nobody can keep their shit together.  The armed forces are spread too far and wide across this planet...if divide and conquer is a great war tactic, then our military generals have done that to the US...our military downfall will be one of incompetence and our ever expanding greed for imperialistic rule over the entire world.  this country is fucked...not because of what it could be, but because of what it is---a greedy, narcissistic, power hungry, broke bitch.

WTFUD's picture

Why does there have to be WINNERS & losers, can't everyone get a Prize?

You SANDBAGGING Me Son?

Kinda!

MrBoompi's picture

China was strenghtened while the US was weakend, financially speaking.  And it was done on purpose by the financial planners.  If some countries are to be raised out of poverty, you can bet it will come at the expense of the citizens of wealthy western countries and not the bankers or international industrialists.  

junction's picture

The United States has pretty much ceased producing consumer hardware.  25 years ago, Walmart ads on TV spoke of Walmart selling Made In USA products.  Now, Tesla makes cars that leave the assembly line loaded with production defects and sees its stock price still go up. The NWO and its lapdog Wall Street bunco artists has wrecked the USA's manufacturing industries. 

Ghordius's picture

true... but deceptive

lots of US firms still produce. somewhere else, though

meanwhile, lots of foreign and foreign-sounding brands produce in the US for the US market

example: the Boeing-induced tariff attack on Bombardier (Canadian) resulted in a plane that will be produced mostly in Northern Ireland and assembled in the US... by Airbus

earleflorida's picture

IP is great,... but it is he who manufactures its throughput into tangibles that reap its wealth.

weak or strong dollar both have been inflated away when supply and demand is left at the discretion of a temporay employed consumer workforce cut in half by a fascist autocracy via one paycheck away from thy neo-culturally`adopted company store...

we as american's will soon be without IP, as China triples patents annually....

fucking sad!  

WTFUD's picture

The Latent Patent Argument, Earle?

Is nothing sacred? lol

Consuelo's picture

 

 

Necessity being the mother of invention...

yogibear's picture

The US has switched from producing real thing to producing debt a while ago.

Goes fro $20 trillion, to 40 trillion in less than 8 years to 80 trillion in 14 years, doubling every 7 years easy to see.

lester1's picture

This tax cut plan is going to help China, Germany, and Mexico.

 

I haven't bought any Oreo cookies/Nabisco products since 2016 when they moved their Chicago plant to Mexico and fired 400 American workers!

Grouchy-Bear's picture

Well the stores here in Moscow, Russia are now full of the damn things. Dirt cheap and huge displays in all the big stores. I thought they put the factory in Russia the way it looks. I even saw Oreo Ice cream... Gotta love it. Just have not seen Twinkies yet...

lester1's picture

The longer Trump waits to end NAFTA, the more jobs and factories will continue to relocate to Mexico!!

 

Can someone please tell that to Trump!!

yogibear's picture

Good! The Federal Reserve can continue it’s Zimbabwe economics and print more dollars to buy the debt.

To Hell In A Handbasket's picture

Print more and just continue to pretend the USSA is solvent and doing well. 

Snaffew's picture

yet the Jews keep dumping derivtives woth billion on the open market in regard to PM's.  Nothing will get in the way of the "Chosen Ones".  Burn those cockles.

WTFUD's picture

The US is, the gift that keeps on giving. lol

Gold Fingers's picture

Kong buying Evitrade Health here as they've just aquired a freakin molecular research company that can "tailer make" marijuana based on people's genetics! Unreal.

https://forexkong.com/trade-alert-evitrade-to-aquire-cantech-molecular/

WTFUD's picture

All the best shit's in Afghanistan bruv, that's why the US refuses to leave. Everybody there, IS, Taliban, ZATO, Blackwater, Locals, ALL GENES are bombed, literary & metaphorically speaking.

It's a BLAST over there, and if it wasn't for those suicide bombings & ambushes i'd recommend a fortnight's holiday, sitting on top of a mountain range, in a cave with an opium bong is the dog's bollocks.

Gold Fingers's picture

Kong buying Evitrade Health here as they've just aquired a freakin molecular research company that can "tailer make" marijuana based on people's genetics! Unreal.

https://forexkong.com/trade-alert-evitrade-to-aquire-cantech-molecular/

MrBoompi's picture

The headline is just plain dumb.  When the dollar weakens our trade deficit increases immediately, since we import much more than we export and pay more for the things we import.  If the weaker dollar leads to more exports, this will not be immediately reflected in the trade figures.  In addition, it the prices of our exports do not rise in proportion to the dollar devaluation, our foreign suppliers will benefit because their stronger currencies buy more.  Why some people believe a weaker dollar is good is beyond me unless they are an employee of the Federal Reserve or a corporation with foreign subsidiaries, because it is bad for American citizens.  If we were allowed to have a free FX market since the Fed was formed, our dollar would be worth a fucking lot more than it is today.  But we are being purposefully damaged by monetary policy.  

Consuelo's picture

+1

 

A weaker dollar only makes sense in an upside-down economic construct, where debt & consumption take precedence over savings & production.

This dynamic acquired its 'legs' in the early 1980's when it was decided that deficits didn't matter and anachronisms like 'lay-away' plans no longer made sense when you could have essentially anything you wanted, right now...