Trade deficit narrows to $1.5 billion in October

Record imports lift US trade deficit to $48.7 billion in October, highest since January

Record imports lift US trade deficit to $48.7 billion in October, highest since January

Goods and services from China totaled $48.2 billion, while European Union imports amounted to $39.4 billion and Mexico's exports grew to $28.7 billion, which are all record highs.

The trade deficit increased to the highest since January and was above expectations of a Reuters poll of economists who had predicted the October deficit would stand at $47.5 billion.

Prices were up 1.5 per cent and volumes increased 1.2 per cent.

Meanwhile, imports fell 1.6 per cent to $45.9 billion in October, mainly due to a drop in motor vehicles and parts.

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The U.S. trade deficit with Canada increased from $300 million in September to $1.8 billion in October, with U.S. imports rising $1.4 billion-primarily crude oil-to $25.8 billion.

Trump, who has been highly critical of the USA trade deficit with China, shifted responsibility for the gap to previous US administrations for failing to crack down on China amid widening trade gaps.

Several powerful late-summer hurricanes may have affected trade data for recent months, though the Commerce Department said the "effects generally can not be isolated".

"While survey measures of export orders appear to have peaked for now, they remain consistent with stronger export growth", said Michael Pearce, US economist at Capital Economics. In the first 10 months of 2017, the value of USA imports rose 6.5% and exports increased 5.3% compared with the first 10 months of 2016.

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But trade deficits this year - which have reached $462.9 billion and are up 11.9 percent from last year - are on track to eclipse 2016 levels and will likely climb to more than $500 billion by year's end. USA exports to China increased $2.2 billion to $13.0 billion, primarily driven by soybeans and crude oil.

The dollar has weakened this year, making USA -produced products cheaper for foreign consumers.

Historically speaking, the US imports more good than it exports, but runs a modest trade surplus for services.

Narrowing this trade deficit has been one of President Donald Trump's priorities since taking office, and he has turned a critical eye toward trade agreements made among multiple countries.

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The Trump administration has focused its trade policy efforts on lowering the trade deficit, arguing that the United States has been shafted in trade deals such as the North American Free Trade Agreement.

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