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US Trade Balance widen to $42.6 billion

Tuesday, Dec 06 2016
US Trade Balance widen to $42.6 billion

The U.S. trade deficit recorded its biggest increase in more than 1-1/2 years in October as exports of soybeans and other products fell, suggesting trade would be a drag on growth in the fourth quarter. The Commerce Department said on Tuesday the trade gap rose 17.8 percent, the largest increase since March 2015, to $42.6 billion. Higher imports due to rising domestic demand also contributed to the widening of the deficit. When adjusted for inflation, the deficit rose to $60.3 billion from $54.2 billion in September.

 

Exports contributed 0.87 percentage point to the third quarter's 3.2 percent annualized rate of increase in gross domestic product. The jump in exports in the last quarter largely reflected a surge in soybean shipments to China after a poor harvest in Argentina and Brazil. While the reversal in soybean shipments, which is weighing on exports, suggests trade is likely to subtract from GDP growth in the fourth quarter, consumer spending and a firming housing market are expected to keep supporting the economy.

 

Euro is currently being traded around 1.0720 level, Sterling is at 1.27 handle, while Aussie is around 0.7460 area.

Last modified on Tuesday, 06 December 2016
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