US trade deficit widens by more than forecast on goods demand

The US trade deficit widened by more than expected in September, reflecting the resilience of American demand for foreign goods.

The shortfall in goods and services trade expanded 4.9% from the prior month to US$61.5 billion (RM286.41 billion), Commerce Department data showed on Tuesday. The median estimate in a Bloomberg survey of economists had called for a US$59.8 billion gap.The value of imports rose to the highest since February, while exports increased to a more than one-year high. The figures aren’t adjusted for inflation.

With the help of solid hiring and low unemployment, American demand for foreign-made goods like cell phones and cars remains firm. That said, there are a growing number of headwinds at home and abroad in the final three months of the year.
Economists anticipate consumer spending to slow markedly from last quarter’s breakneck pace as the labour market begins to cool.

The October jobs report released last week showed notable signs of weakness, while tepid economic activity overseas — including growing recession risk in nations like Germany and the UK — may weigh on foreign demand for American products.

The increase in imports reflected more inbound shipments of consumer goods as well as capital goods like computer parts. Exports of petroleum and agricultural products also rose.