WASHINGTON (AP) — The U.S. trade deficit widened more than expected in September as foreign oil prices rose to the highest level in nearly a year, swamping a fifth consecutive gain in exports.
Still, economists expect a rebounding global economy will keep pushing demand for exports higher, helping to bolster the U.S. recovery.
The Commerce Department said Friday that the trade deficit jumped 18.2 percent in September to $36.5 billion. That was the largest deficit since January and more than the $31.7 billion imbalance economists had expected.
Exports, which have been rising since May, increased 2.9 percent to $132 billion, reflecting stronger sales of American autos, aircraft and industrial machinery.
Imports rose 5.8 percent to $168.4 billion, led by a 20.1 percent jump in oil shipments.
So far this year, the trade deficit is running at an annual rate of $366 billion, about half of last year’s $695.9 billion deficit. But economists do not expect that trend to continue.
The monthly deficit is already significantly higher than the nine-year low of $26.4 billion hit in May and analysts expect the imbalances will keep rising in the months ahead.
Further rises in exports should provide significant support to U.S. manufacturers and the overall economy, but some of those gains will be offset by a rebound in imports as demand for foreign goods also picks up, analysts said.
The deficit with China, which had been falling, jumped 9.2 percent to $22.1 billion in September, the highest imbalance in 10 months. For the year, the deficit with China is down 15.9 percent although the gap is still the largest the U.S. has with any country.
The deficit with Japan slipped 4.8 percent to $4.8 billion in September.
President Barack Obama was in Tokyo on Friday for the start of a weeklong trip to Asia that will take him to China, South Korea and Singapore. The administration has said the visit is intended to lift America’s profile in a region of the world that accounts for one-fourth of America’s export sales.
The Chinese central bank on Thursday modified the guidance it uses to manage its currency, the yuan, in relation to the U.S. dollar. The wording change raised hopes among economists that China was preparing to allow its currency to rise in value against the dollar, a change that would boost the competitiveness of American products in China.
American manufacturers contend that China is manipulating the value of its currency, keeping it undervalued by as much as 40 percent in relation to the dollar, which gives Chinese manufacturers a huge competitive advantage. American companies contend that the undervalued currency has played a major role in the loss of millions of U.S. manufacturing jobs over the past decade. The undervalued currency, however, is a boon to American consumers, lowering the cost of Chinese goods in the U.S.
Business
<img src=" http://www.joplinglobeonline.com/images/zope/friday.gif" border=0> Trade deficit widens more than expected in Sept.
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