Trade deficit widened in September

The nation’s trade gap widened in September as exports slipped from a record high and as the U.S. economy strengthened against a backdrop of slower global growth.  

The trade deficit increased 7.6 percent, to $43 billion, in September, the first expansion in four months, up from $40 billion in August, the Commerce Department said Tuesday.

ADVERTISEMENT

Exports, which reflected slowing demand in Europe, Latin America and Japan for U.S. products, fell 1.5 percent to $195.6 billion, the lowest level since April, from a record $198.6 billion in August.

Declines in exports were broad based and led by drops in consumer and capital goods, cars and industrial supplies.

In fact, the European Union on Tuesday cut its growth forecast to 0.8 percent from an initial estimate of 1.2 percent made earlier this year, a sign that conditions are expected to remain slow in countries like Germany. 

Looking ahead to next year, growth is expected to post a 1.1 percent increase compared with an earlier forecast of 1.7 percent.

Treasury Secretary Jack LewJacob (Jack) Joseph LewObama talks up Warren behind closed doors to wealthy donors On The Money: Lawmakers pile on the spending in .4T deal | Trump-Pelosi trade deal creates strife among progressives | Trump, Boris Johnson discuss 'ambitious' free-trade agreement Former Obama Treasury secretary endorses Biden MORE in September suggested that Germany take the lead in trying to stimulate its economy and, in turn, boost broader EU growth.

Amid weakening global growth, the U.S. economy is showing strong signs of improvement.

More jobs — the October report is due out on Friday — and falling gas prices should help boost consumer spending, which accounts for about 70 percent of economic activity. 

So, the improving U.S. economy should fuel domestic demand and an expansion of imports as exports fall.

Meanwhile, imports held steady at $238.6 billion. 

That U.S. deficit with China rose 17.6 percent, to a record of $35.6 billion, on a 12.7 percent jump in imports from there, most likely boosted by sales of new iPhone models. Apple assembles many of its products in China.

At this rate, the trade deficit China will hit another record for the year.