The US trade deficit widened in September by an unexpectedly large 18.2 per cent, the largest increase in more than 10 years, as oil prices rose for the seventh straight month and imports from China bounded higher.
Adding urgency to talks US president Barack Obama will have with Chinese leaders in coming days, the monthly trade gap grew to $36.5 billion, from a slightly revised estimate of $30.8 billion in August, the Commerce Department said today.
The monthly trade gap grew to $36.5 billion, from a slightly revised estimate of $30.8 billion in August.
Wall Street analysts had expected the shortfall to grow modestly in September to around $31.65 billion.
Both US exports and imports had their best month since December 2008. But in a sign of renewed US economic growth, imports grew 5.8 percent in September, the biggest monthly gain since March 1993, while exports rose 2.9 per cent.
Some analysts had expected more of an export boost because the drop in the value of the dollar against other major currencies makes American goods more competitive overseas.
But "the overall upturn in US demand is trumping the fall of the dollar," said Craig Peckham, an equity trading strategist with Jefferies and Company in New York.
Imports of industrial supplies and materials showed the biggest gain in September, suggesting that U.S. manufacturers are ramping up for production.
International trade flows are picking up as massive stimulus from governments and central banks lift the global economy out of its deepest swoon since the 1930s.
The EU statistics office Eurostate said the euro-zone economy grew 0.4 per cent in the third quarter from the second quarter, snapping the region's recession.
The US government said last month the economy grew at an annual rate 3.5 per cent in the third quarter after four contractionary quarters.
The average price for imported oil leapt to $68.17 per barrel and imports from the Organisation of Petroleum Export Countries increased to $11.9 billion in September, both the highest since November 2008.
A separate report showed US import prices rose for the third straight month in October, pushed up by a jump in the cost of fuel imports and the depreciating dollar.
Import prices advanced 0.7 per cent after a revised 0.2 per cent increase in September that was previously reported as a 0.1 per cent gain, the Labor Department said.
The weak US dollar is helping to lift US exports, but at the same time, analysts cite it as a factor pushing up the price of oil and other commodities.
The US dollar extended losses against the yen after the trade data. US stock index futures held gains, while US Treasury debt prices were steady at lower levels.
The closely watched U.S. trade deficit with China widened 9.2 per cent to $22.1 billion as imports grew 8.3 per cent to $27.9 billion, both also the highest since November 2008.
The overall US trade deficit, including with China, has fallen significantly this year in response to the worst economic downturn in decade.
But the gap with China narrowed just 15.9 per cent in the first nine months of the year, compared with much bigger declines for Canada (79.6 per cent), the European Union (42.0 per cent) and OPEC (71.8 per cent).
That has reinforced ideas that China's currency remains overvalued against the dollar, giving Chinese companies an unfair trade advantage.
President Obama is expected to raise concerns about China's exchange rate regime when he meets with Chinese leaders next week in Beijing. Today, he was in Japan for talks before heading to Singapore for this weekend's annual summit meeting with leaders of the Asia Pacific Economic Cooperation forum.
With US unemployment the highest in 26 years, Mr Obama has said he would press for a rebalancing of world economic growth where countries in Asia would open their markets to more American goods and rely less on exports to the United States and more on their own domestic demand.
Reuters