The world’s largest economy’s total trade deficit increased by 5.1% to $64.3 billion in October, up from a revised $61.2 billion in September, according to the Commerce Department.
The growing trade imbalance in October was caused by a $2.6 billion drop in US exports to the rest of the world, while imports increased by $500 million.
According to Briefing.com, this was somewhat lower than market projections for the deficit to rise to $64.4 billion.
Since the Covid-19 pandemic, US consumers and companies have faced higher interest rate environments, as authorities have sought to combat inflation by tightening monetary policy.
While these policies have had some impact in lowering inflation, they have also lowered demand for goods and services among consumers who are facing greater financing costs as well as increased product prices.
“The outlook for trade flows going forward is likely one of moderation, given the trajectory for demand and growth will slow, both domestically and abroad,” High-Frequency Economics Chief US Economist Rubeela Farooqi wrote in a note to clients.
The US trade deficit with China, the world’s second-largest economy, fell marginally in October to $23.9 billion, down from $24.1 billion a month earlier, according to the Commerce Department.