- Millan Mulraine, deputy chief economist at TD Securities
US trade deficit widened more than expected in September as exports dropped to the lowest level in five months, indicating slowing global demand could hamper growth of the world's biggest economy in final quarter of the year. The trade gap rose 7.6% to $43.03 billion, the Commerce Department reported. Economists, however, had expected a shortfall at $40 billion in September. The trade deficit appeared to be bigger than the $38.1 billion gap that the government had included in its advance gross domestic product estimate for the third quarter published last week. This suggests the 3.5% annual growth pace it estimated will probably be slashed by as much as 0.3 percentage point when the government publishes its revisions later this month. Trade was reported to have contributed 1.32 percentage points to GDP growth.
Exports in September fell 1.5% to $195.59 billion, the lowest since April, a sign that weakening demand in key markets such as China and the Euro zone was starting to weigh. Exports are likely to weaken further after a survey of US manufacturers showed a decline in a gauge of export order growth. Besides slowing global demand, export growth is seen hit by a strong Greenback, which so far this year has gained by about 4% against the currencies of the US main trading partners. At the same time, imports remained at the previous month's level of $238.6 billion, while imports of services alone reached a record high of $39.9 billion.
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