The trade deficit in the US widened in September by the most in a decade, reflecting rising demand for imported oil and automobiles as the economy rebounded from the worst recession since the 1930s.
The gap grew a larger-than-anticipated 18 per cent to $36.5 billion, the highest level since January, from a revised $30.8 billion in August, the Commerce Department said in Washington. Imports surged by the most in 16 years, swamping a gain in exports.
Demand for foreign products may remain elevated in coming months as consumer and business spending improve and companies aim to prevent inventories from collapsing even more. Exports may also rise as expanding economies in Asia and Europe and a weak dollar drive demand for American goods, giving manufacturers such as Dow Chemical Co a lift.
“Sometimes what looks bad on the surface is actually quite good and I think that’s the case this time around,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Exports are growing strongly and imports are turning up because domestic spending has turned the corner.”
The dollar dropped after the report. One euro cost $1.4875 at 8:50 am in New York, up 0.2 per cent from late Thursday. The yen climbed to 89.68, up 0.8 per cent. Stock-index futures pointed to a gain at the open.
The trade gap was projected to widen to $31.8 billion, from an initially reported $30.7 billion in August, according to the median forecast in a Bloomberg News survey of 77 economists. Deficit projections ranged from $28.6 billion to $34.1 billion.
