US trade deficit drops in Oct
The US trade deficit in goods and services decreased to $73.8 billion in October 2024, down $10.0 billion from the previous month, according to data released by the US Census Bureau and the Bureau of Economic Analysis on Thursday. This marks a positive development after September’s revised deficit of $83.8 billion.
Exports in October totaled $265.7 billion, a decrease of $4.3 billion from September, while imports were $339.6 billion, a drop of $14.3 billion. The reduction in the deficit was driven by a $10.4 billion decrease in the goods deficit, which stood at $98.7 billion, and a smaller $0.4 billion decrease in the services surplus, which amounted to $24.8 billion.
While the October numbers reflect a short-term improvement, year-to-date data shows that the goods and services deficit has risen by $80.7 billion (12.3 per cent) compared to the same period in 2023. Exports have increased by $94.0 billion (3.7 per cent), but imports have surged by $174.7 billion (5.4 per cent), contributing to the growing deficit.
In terms of three-month averages, the goods and services deficit decreased by $1.8 billion to $76.1 billion in October. Average exports decreased slightly by $0.5 billion to $269.5 billion, while average imports fell by $2.3 billion to $345.5 billion.
Decline in Goods Exports and Imports
The decrease in exports was largely driven by a $5.3 billion drop in goods exports, with significant declines in capital goods, automotive vehicles, industrial supplies, and consumer goods. However, exports of services saw a slight increase of $1.0 billion, driven by higher demand for travel, business services, and maintenance.
Imports of goods dropped by $15.7 billion in October, led by declines in capital goods, industrial supplies, and consumer goods. Notably, imports of computers, semiconductors, and crude oil saw substantial decreases. On the other hand, imports of services increased by $1.4 billion, with higher spending on travel and intellectual property services.
Deficits with Major Trading Partners
The data also highlights shifts in trade balances with major trading partners. The U.S. recorded a significant trade deficit with China, which increased by $10.0 billion to $70.3 billion in the third quarter. Other notable deficits were with the European Union, Mexico, and Vietnam. However, surpluses were reported with countries like the Netherlands, South and Central America, and the United Kingdom.
While the October trade figures show some improvement in the deficit, the overall trend for the year suggests continued pressure on the U.S. trade balance as imports outpace exports.
Attribution: The US Census Bureau & The US Bureau of Economic Analysis
