Trade Deficit Rises Unexpectedly

Washington, DC,  Dec. 11, 2008--America's trade deficit rose unexpectedly in October as a spreading global recession dampened sales of U.S. products overseas.
 
The Commerce Department said Thursday that the trade deficit rose to $57.2 billion October, 1.1 percent higher than the September imbalance of $56.6 billion. Analysts expected the deficit to decline to $53.5 billion on lower oil prices.

The average price for a barrel of crude oil did drop by a record amount but that was offset by a record surge in the volume of oil imports. That sent the total oil bill up by 3 percent to $37.7 billion.

The politically sensitive deficit with China jumped to a record $26 billion in October as imports of toys, computers and televisions surged. However, with the U.S. and much of the rest of the world now in a recession, China's export-led growth is beginning to falter, raising fears that rising job layoffs at Chinese factories could trigger political unrest among displaced workers in the world's fourth largest economy.

For October, exports of goods and services dropped by 2.2 percent to $151.7 billion, the lowest level since January. The decline reflected weaker sales for American farm products such as corn, wheat and meat, and widespread declines in manufactured goods including aircraft, semiconductors and heavy machinery.

Imports fell by 1.3 percent to $208.9 billion, led by a $921 million decline in imports of autos and auto parts as foreign car companies are being hit by the same downturn that has sent Ford Motor Co., General Motors Corp. and Chrysler LLC to Congress in search of bailout support.