General

According to customs data, the trade deficit of the United States expanded significantly, increasing 5.4% month on month to US $78.2 billion, while the volume of commodity exports fell to a seven month low of US $176 billion.

According to customs data, this is the second consecutive month that the US trade deficit has expanded. Analysts believe that if the trend continues, the US economy will be dragged down in the fourth quarter.

According to customs data, US exports fell 0.7% month on month to US $256.6 billion in October. Commodity exports fell 2.1% to US $176 billion, the lowest level since March this year.

Specifically, U.S. industrial goods exports decreased, mainly natural gas and other petroleum products, but crude oil exports increased by 1.6 billion dollars. The export of consumer goods declined, mainly due to the decline of $2.2 billion in drug exports.

In addition, US food exports rose, boosted by soybeans. Driven by tourism, transportation and other commercial services, US service exports increased by 1.8 billion US dollars, reaching a record high of 80.6 billion US dollars.

"Drug trade has always been notoriously unstable. With the two-way international transportation of COVID-19 vaccine, the situation will only get worse." Said Paul Ashworth, chief North American economist at Capital Economics, a British economic research institute.

Customs data showed that, on the other hand, US imports in October increased 0.6% month on month to 334.8 billion US dollars. The volume of commodity imports increased by 0.9% to US $275.6 billion, mainly driven by industrial supplies, raw materials and other commodities.

Among them, the import of drugs increased by 2.7 billion US dollars, and the import of automobiles, spare parts and engines reached a record high.

After adjusting for inflation, the US commodity trade deficit in October further increased to 112.6 billion US dollars - the actual export of goods was 158.4 billion US dollars, and the actual import of goods was 271 billion US dollars.

According to customs data, the Federal Reserve continued to raise the level of the federal funds interest rate, leading to a sharp rise in the exchange rate of the U.S. dollar against other currencies, raising the price of American goods, weakening its international competitiveness, which is not conducive to the increase of exports. A survey conducted by the American Institute of Supply Management (ISM) in December also showed that the US manufacturing and service industry export indicators fell into contraction range in November.

"The trade balance is further broken, which will drag down the economic growth in the fourth quarter." Veronica Clark, an economist at Citigroup in New York, said that the growth in demand for domestic business investment in the United States may also offset the impact of the trade deficit.

Conrad DeQuadros, senior economic adviser of Brean Capital, an American investment bank, believes that if the trade deficit in October continues to expand until November and December, the real GDP growth of the United States in the fourth quarter will decrease by about 2.5 percentage points.