(Bob Willis — Bloomberg)
The U.S. trade deficit unexpectedly widened in October as faltering global demand led to a third consecutive drop in exports, signaling the American economy is sinking even faster than previously estimated.
The gap expanded 1.1 percent to $57.2 billion from a revised $56.6 billion in September, the Commerce Department said today in Washington. Exports dropped to the lowest level in seven months as foreign purchases of U.S. aircraft, automobiles, chemicals and food waned.
The global credit crunch is slowing growth in Europe, Asia and Latin America, indicating the U.S. can no longer count on gains in trade to help offset the recessions in housing and manufacturing. American households and businesses are also retrenching, a sign that purchases of foreign oil, televisions and computers will keep softening.
“Trade is going to be a significant drag on fourth-quarter growth,” said Dean Maki, co-head of U.S. economic research at Barclays Capital Inc. “The slowdown in foreign demand is hitting manufacturing.” Read more here.