WASHINGTON – The U.S. trade deficit widened unexpectedly in October to a record $68.9 billion despite a drop in the cost of imported oil, as the deficits with China, Canada, the European Union, Mexico and OPEC all hit records, government data showed on Wednesday.
Economists had expected the trade gap to shrink in October to $63.0 billion, and the surprising growth in the imbalance suggests fourth-quarter economic growth will likely be even weaker than first thought.
The Commerce Department said the deficit widened 4.4 percent from September after growing 11.9 percent the previous month.
Imports of goods and services rose 2.7 percent to a record $176.4 billion while exports increased a smaller 1.7 percent to $107.5 billion.
While oil import prices declined in the month to an average $56.29 per barrel, the volume of crude imports surged 9.3 percent, driving the value to $17.1 billion, the second-highest on record. Imports of energy-related petroleum products, a wider category that includes propane and butane, hit a record $26.2 billion.
Imports of industrial supplies and materials and automotive vehicles and parts rose to records in October. Imports of consumer goods also climbed, while decreases occurred in foods, feeds and beverages and capital goods.
Trade through hurricane-damaged Gulf Ports picked up in October. Imports rose $3.6 billion while exports climbed $1.3 billion, on a non-seasonally adjusted basis.
The politically sensitive trade deficit with China widened 2.1 percent to a record $20.5 billion as imports from that country rose 4.8 percent to $24.4 billion.
The increase in the deficit with China came despite a 10.9 percent drop in textile imports in October. Washington and Beijing reached a deal last month to rein in China's surging clothing and textile exports to the United States through 2008. Textile imports from China are up 47.6 percent so far in 2005 compared to 2004.
The deficit with Canada, Mexico, the European Union and OPEC countries also widened to record levels.
Ten months into the year, the overall trade deficit reached $598.3 billion, just $19.3 billion shy of the record $617.6 billion deficit set in 2004.