(RTTNews.com) - Reflecting a modest increase in the value of imports and a slight decrease in the value of exports, a report released by the Commerce Department on Thursday showed the U.S. trade deficit widened to a ten-year high in the month of October.
The Commerce Department said the trade deficit widened to $55.5 billion in October from a revised $54.6 billion in September.
Economists had expected the trade deficit to widen to $55.0 billion from the $54.0 billion originally reported for the previous month.
The trade deficit widened for the fifth consecutive month, reaching its highest level since hitting $60.2 billion in October of 2008.
The wider than expected trade deficit was partly due to the uptick in the value of imports, which crept up by 0.2 percent to $266.5 billion in October from $265.9 billion in September.
Notable increases in imports of pharmaceutical preparations, automotive vehicles and parts, and other goods were partly offset by a steep drop in imports of capital goods.
On the other hand, the Commerce Department said the value of exports edged down by 0.1 percent to $211.0 billion in October from $211.4 billion in September.
Exports of soybeans showed a continued decrease amid Chinese tariffs, moving lower along with exports of civilian aircraft and engines. Meanwhile, exports of industrial supplies and materials and other goods rose.
Andrew Hunter, U.S. Economist at Capital Economics, said the wider deficit in October suggests net trade will once again be a drag on GDP growth in the fourth quarter.
In addition to the continued drop in soybean exports, Hunter said the decrease in exports may also indicate that the U.S. dollar's 8 percent appreciation this year is starting to take its toll.
"Even so, with consumption growth still strong, we still expect fourth quarter GDP growth to come in at between 2.5% and 3% annualized," Hunter said.
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