The US trade deficit widened slightly in October, powered by rising oil prices that overcame a strong export performance driven by the falling dollar.
The Commerce Department reported a $57.8 billion gap with the rest of the world, up 1.2 per cent from the upwardly revised $57.1 billion September figure. Economists polled by Thomson IFR Markets had expected a small increase to $57 billion from the originally reported $56.5 billion September deficit.
Imports were up 1per cent to $199.5 billion. Oil imports by barrel rose 6.3 per cent in October, but the dollar value rose 12.4 per cent as the price of imported oil hit a record $72.49.
US demand for non-petroleum imports actually fell fractionally as the economy slowed and the weakening dollar raised import prices. The non-petroleum trade deficit fell to $38.5 billion, its lowest level since March 2004.
Auto imports rose just $72 million while imports of business equipment and agricultural products were down for the month.
October exports rose 0.9 per cent to $141.7 billion. Capital goods exports were the prime factor, up $1.3 billion to a record $39.2 billion and led by civilian aircraft as is usually the case.
Surprisingly, given the global increase in food prices, US agricultural exports fell half a billion dollars.
The politically sensitive trade deficit with China accounted for 45 per cent of the total US trade deficit in October, rising 9.1 per cent to $25.9 billion. The US also had a record $7.5 billion trade deficit with Mexico.