U.S. Trade Gap Widens More Than Forecast to $41.8 Billion

Photographer: Tim Boyle/Bloomberg
The gap in goods and services trade increased 8 percent to $41.8 billion from a revised $38.7 billion in August.

The trade deficit in the U.S. widened more than forecast in September to a four-month high, reflecting a pickup in imports of consumer goods and capital equipment. Exports declined for a third month.

The gap in goods and services trade increased 8 percent to $41.8 billion from a revised $38.7 billion in August, the Commerce Department reported today in Washington. The median forecast in a Bloomberg survey of 72 economists called for a $39 billion deficit.

The U.S. imported more mobile phones, while shipments of automobiles from overseas producers reached a record, indicating American companies were confident domestic demand would be sustained. Limited progress in foreign markets has held back demand for U.S.-made goods, indicating it will take time for the economy to get a bigger boost from trade.

“It’s an indication that domestic demand is still picking up with the increase in imports,” said Tim Quinlan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. Wells Fargo is the top forecaster of trade in the last two years, according to data compiled by Bloomberg. “Our expectation going forward would be that, for the first time in a long time, trade will be one of the things that’s helping to underpin economic growth in the United States.”

Photographer: David Paul Morris/Bloomberg

A tug boat moves the APL Singapore container ship to dock at the Port of Oakland in Oakland, California. Close

A tug boat moves the APL Singapore container ship to dock at the Port of Oakland in Oakland, California.

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Photographer: David Paul Morris/Bloomberg

A tug boat moves the APL Singapore container ship to dock at the Port of Oakland in Oakland, California.

Estimates in the Bloomberg survey ranged from deficits of $37 billion to $41.6 billion after a previously reported $38.8 billion shortfall in August. The report, initially scheduled for Nov. 5, was delayed by a 16-day partial shutdown of the federal government.

Jobless Claims

Jobless claims in the week ended Nov. 9 declined 2,000 to 339,000 from a revised 341,000 the week before that was higher than initially reported, the Labor Department said today in Washington. The median forecast of 51 economists surveyed by Bloomberg called for a drop to 330,000. Applications for five states were estimated because of the Veterans Day holiday-shortened week, the Labor Department said.

Stock-index futures rose, indicating the Standard & Poor’s 500 Index will extend an all-time high, as Janet Yellen signaled she plans to continue the Federal Reserve’s monetary stimulus. The contract on the S&P 500 expiring next month climbed 0.2 percent to 1,781.5 at 8:45 a.m. in New York.

Exports decreased 0.2 percent to $188.9 billion, today’s trade data showed. Overseas demand has eased each month after reaching a record $190.5 billion in June. American companies shipped less fuel oil, chemicals and coal to foreign customers.

Imports Increase

Imports climbed 1.2 percent to $230.7 billion, the highest since November 2012. Inbound shipments of mobile phones such as Apple Inc.’s iPhone, rose $915 million in September. Imports of civilian aircraft, semiconductors and computer accessories also increased.

Demand for imported autos climbed $887 million to a record $27.1 billion in September.

After eliminating the influence of prices, the trade deficit in September widened to $50.4 billion from $47.4 billion. The Commerce Department’s Nov. 7 report on gross domestic product showed trade contributed 0.3 percentage point to the growth in the third quarter.

The world’s largest economy expanded at a 2.8 percent annualized pace in the three months ended in September after a 2.5 percent in the second quarter.

European Economy

In Europe, the economy is struggling to gain momentum after recovering from a record-long recession, helping explain European Central Bank President Mario Draghi’s case for an interest-rate cut. Gross domestic product in the 17-nation euro area increased 0.1 percent in the third quarter a advancing 0.3 percent in the prior three months, according to the European Union’s statistics office in Luxembourg.

The European Commission last week cut its forecast for euro-zone growth in 2014, anticipating 1.1 percent expansion rather than the 1.2 percent forecast in May.

China’s economy entered the fourth quarter with a pickup in manufacturing and exports. Standard Chartered Plc last month raised its estimate for 2013 growth in China to 7.6 percent from 7.5 percent and revised next year’s forecast to 7.4 percent from 7.2 percent.

“Despite a number of positive underlying market fundamentals, political uncertainties in key regions continue to hinder economic recovery,” said Andrew N. Liveris, chief executive officer at Midland, Michigan-based Dow Chemical Co., said on an Oct. 24 conference call.

Overseas Demand

“China is stabilizing,” he said. “And looking ahead, we see fundamentals improving for stronger growth in 2014. However, heading into the fourth quarter, we have yet to see a clear uptick in holiday export demand.”

The U.S. posted a record $30.5 billion deficit with China in September, today’s trade figures showed.

Treasury Secretary Jacob J. Lew is in Asia this week as part of a White House effort to improve economic ties with the region and discourage trading partners from manipulating their currencies to promote exports. President Barack Obama announced an initiative in 2010 to double U.S. exports between 2009 to 2014, to $3.14 trillion. They totaled $2.2 trillion last year.

World GDP is projected to grow 2.6 percent in the fourth quarter after an estimated 2.3 percent in the previous three months, based on the median economist forecast in a Bloomberg survey.

To contact the reporter on this story: Jeanna Smialek in Washington at jsmialek1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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