The US trade deficit widened unexpectedly in October as imports from China rose to a new high and the volume of oil imports rebounded as prices fell by a record amount, a Commerce Department report showed today.
The trade gap grew 1.1 per cent to $57.2 billion, even though imports and exports both fell for the third consecutive month in the face of slumping world demand. Wall Street economists had expected the trade gap to narrow in October to $53.5 billion.
Even as overall imports fell, imports from China increased 2.8 per cent to $34 billion, which will likely fuel US criticism that China's currency remains undervalued against the dollar. The US trade gap with China also set a record at $28 billion.
However, November data from China's government released this week showed the country's exports fell for the first time in almost seven years in a sign of world economic woes.
US oil imports jumped by a record 70.9 million barrels in October, as prices fell by a record $15.56 per barrel to $92.02. The increased volume pushed the monthly oil import tab higher, despite prices falling below $100 per barrel for the first time in six months.
The drop in both US imports and exports comes as the World Bank is forecasting world trade to drop 2.1 per cent in 2009, the first decline since 1982, as recessions in the United States, Japan and Europe cut into consumer spending.
Even as the US auto industry is pleading for government aid to survive, imports of foreign autos and auto parts fell in October to their lowest since September 2003.
Imports of consumer goods increased slightly in October, after dropping in September, as retailers stocked shelves for what is expected to a bleak holiday shopping season.
Reuters