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Published January 14, 2015
The U.S. trade deficit (search) widened nearly 9 percent in October to a record $55.5 billion as sky-high oil prices helped propel imports into uncharted territory, the government said on Tuesday.
October's unexpectedly large shortfall pushed the deficit tally for the first ten months of the year to $500.5 billion, surpassing the record of $496.5 billion for all of 2003.
Despite a continued slide in the value of the dollar, the trade gap grew by 8.9 percent in October, from a revised $50.9 billion in September. The shortfall was much larger than a mid-point estimate of $53.0 billion from Wall Street analysts surveyed by Reuters.
Imports jumped to a record $153.5 billion in October, fueled by record prices for imported oil, which averaged $41.79 per barrel, according to the Commerce Department (search).
The United States imported a record $9.5 billion worth of oil and other goods from members of the Organization of Petroleum Exporting Countries (search). The trade gap with OPEC also set a record at $7.2 billion.
The U.S. trade gap with China — politically sensitive because U.S. exporters blame an artificially low yuan currency for keeping the China's goods unfairly cheap — also hit a record $16.8 billion, as imports from the Asian giant leapt to a record $19.7 billion.
The 3.4 percent rise in imports overwhelmed a 0.6 percent increase in exports to a record $98.1 billion. Aided by the dollar's fall, exports increased 12.8 percent in the first ten months of 2004, compared to the same period last year. However, imports have risen by 15.6 percent over the same stretch.
The dollar's fall has gathered pace in recent weeks, in part on worries about huge U.S. budget and trade shortfalls.
Some analysts say a protracted dollar slide is necessary to help bring the U.S. trade deficit down to a more sustainable level. However, there also is a fear that too sharp a decline could shatter confidence in the greenback, the world's reserve currency.
The trade report is likely to be the last piece of major U.S. economic data that Federal Reserve (search) officials will have in hand before they meet on Tuesday to consider whether to raise interest rates for a fifth time this year.
Economists are unanimous in expecting the U.S. central bank to nudge benchmark overnight rates up by a quarter of a percentage point to 2.25 percent, part of an effort to that began in June to lift them from the four-decade lows.
https://www.foxnews.com/story/trade-gap-soars-to-record-55-5b-in-oct