The U.S. trade deficit decreased $2.7 billion $32.9 billion in October as a result of exports growing more than imports.  Exports grew $3.4 billion while imports grew $745 million.  Gains in exports were led by increases in autos, aircraft, industrial machinery, and farm products.  Much of the decline in imports reflects a decline in the price of oil.  Exports of goods and services were worth $136.8 billion, the highest level since November 2008, which was 141.5 billion.  Also, the United States exported a record $6.5 billion to China.  The United States imported $29.5 billion worth of goods from China in October.

U.S. Balance of Trade, October 2007 through October 2009

Total U.S. Trade, October 2007 through October 2009

After a considerable decline in U.S. trade deficit between October of 2008 and February of 2009, the deficit began to grow again.  October saw a significant reversal in that trend.  This is likely the impact of the weakness of the dollars, as a weak dollar boosts the appeal of U.S. goods and services abroad.  October also saw a continued increase in the absolute level of trade between the U.S. and its trading partners.  After a massive decline during the height of the financial crisis, total trade has been gradually climbing.  In October total trade increased by $4.2 billion to a level of $306.6 billion.  There is, however, still a nearly $90 billion gap between current levels of trade and pre-crisis levels.

Garrett W. McIntyre