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Thursday, December 11, 2008
US trade gap unexpectedly grows
The US trade deficit unexpectedly grew in October, despite falling oil prices, according to Commerce Department data.
The trade deficit rose to $57.2bn, which was an increase of 1.1% from September's figure.
While there was a record decline in the average cost of a barrel of oil, there was also a record surge in the amount of oil that was imported.
Imports and exports both fell for the third consecutive month as the downturn hit demand.
"It's now clear, what all of us were afraid of, that the global recession is taking its toll on what had been one of the main props for the US economy's expansion," said David Resler at Nomura Securities in New York.
"I think the trade balance is going to shrink, because I think imports are going to fall faster than exports. Both of them represent declines in world production, that can't be good."
There were other signs of the downturn in weekly jobless figures from the Labor Department.
The number of people making initial claims for unemployment benefits rose 58,000 to a seasonally adjusted 573,000 in the week ending 6 December.
It was the highest total since November 1982.
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