- The US trade deficit narrowed for a second straight month in October.
- The drop was the latest sign that tariffs and cooler global growth have weighed on activity in the largest economy.
- Trump views the trade balance a scorecard of sorts in his trade disputes. The figure is driven by a variety of factors, including the strength of an economy and foreign exchange rates.
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The US trade deficit narrowed for a second straight month in October in the latest sign that tariffs and cooler global growth have weighed on activity in the largest economy.
The gap between exports and imports fell 7.6% to a seasonally adjusted $47.2 billion, the Commerce Department said Thursday. That was the smallest it has been since the summer of 2018 and compared with economist expectations for a $48.5 billion deficit.
US exports in October fell by 0.2% from a month earlier to $207.1 billion. Imports dropped by 1.7% in October as shipments of consumer products like electronics and apparel slowed sharply, a potential sign of weakening demand in the US.
The two largest economies have expanded tariffs to far more household products in recent months, raising prices and casting uncertainty on the outlook.
Trade figures have been volatile over the past year and a half as President Donald Trump continued to escalate a series of tit-for-tat tariff fights. The trade deficit with China, which Trump views as a scorecard of sorts in that dispute, fell about 1% to $31.3 billion.
But even as the US imported fewer goods from China in recent months, it has found other international markets to turn to. The trade balance is driven by a variety of factors, including foreign-exchange rates, the strength of an economy, and the amount a country borrows from abroad.
In the first three quarters of the year, the US trade deficit widened more than 5%.