Strong American export business caused a large drop in the US trade deficit last month, even as imports also rose, according to government data released Tuesday.
The gap between imports and exports of goods and services dropped 17.6 percent to $67.1 billion last month, bringing the trade deficit down from a record hit the month before, the Commerce Department reported.
Exports jumped $16.8 billion from September to $223.6 billion, while imports rose by a small $2.5 billion to $290.7 billion.
Sales of goods jumped the most with a $15.8 billion increase led by industrial supplies and materials, while services exports rose only $1 billion.
Meanwhile, the value of goods purchased from abroad rose $1.8 billion, particularly of cars, parts and engines, which rose $1.5 billion. Service imports rose $700 million.
Mahir Rasheed of Oxford Economics called October a “historically strong month for exports,” and noted that while the trade deficit remains above its level before the Covid-19 pandemic, “we expect stronger export growth and moderation in import volumes to keep the deficit stable next year after reaching multiple record highs in 2021.”
“However, the Omicron variant is a key downside risk that threatens to distort trade flows by slowing the global recovery in early 2022,” he added.
Among trading partners, the deficit with China dropped $3.2 billion, with an increase in exports making up most of the change.
The deficit with the European Union fell as well, also due to export growth, though the deficit with Mexico rose by $800 million.
