With exports falling at a faster rate than imports, the Commerce Department released a report on Friday showing that the U.S. trade deficit unexpectedly widened in the month of October.
The Commerce Department said the trade deficit climbed to $43.9 billion in October from a revised $42.5 billion in September.
Economists had expected the trade deficit to narrow to $40.6 billion in October from the $40.8 billion originally reported for the previous month.
The unexpectedly wider trade deficit was partly due to a steep drop in the value of exports, which tumbled by 1.4 percent to $184.1 billion in October from $186.8 billion in September.
Reflecting notable decreases in exports of industrial supplies and materials and capital goods, the value of exports hit a three-year low.
The value of imports showed a more modest decrease, falling by 0.6 percent to $228.0 billion in October from $229.2 billion in September. Excluding petroleum, the value of imports actually rose.
Commenting on the data, Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "This is a lot worse than the advance good trade report had led us to believe."
"As a result, we are lowering our fourth-quarter GDP growth forecast from 2.5% annualized to 2.0%," he added.
The Commerce Department said the goods deficit widened to $63.1 billion in October from $61.0 billion in September, while the services surplus increased to $19.2 billion from $18.5 billion.
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