The Commerce Department announced Friday that the U.S. Trade Deficit hit $36.5 billion in September, the largest amount since this past January. The figure topped the $31.5 billion economists’ were expecting and marks the largest month-over-month increase since the late 1990’s.
The 18.2 percent deficit increase from August to September is the largest of this decade and was last topped by a 20 percent jump in February of 1999.
U.S. exports increased in September, which has been the case in recent months as the continued weakness in the US dollar has made domestic goods more attractive to foreign countries. Total exports for the month were $3.7 billion more than the $128.3 billion registered in August.
The goods increase was mainly led by a $1.7 billion jump in capital goods, followed by a $1.4 billion rise in industrial supplies and materials. Consumer goods also chipped in with 0.5 billion in exports.
The weak dollar has also been a catalyst for increased imports, as oil imports have cost America more recently. This was evidenced by the $5.5 billion increase in imports for industrial goods and materials.
Total U.S. imports for September were up $9.3 billion, compared to August imports of $159.1 billion.
On the flipside, in September, the goods and services deficit decreased $23.7 billion compared to September 2008. The decline is due to a whopping $43.7 billion drop in imports from a year ago, while exports are just down $20 billion.
Additionally, the U.S. trade deficit is running at an annual rate of $366 billion, which is about half of last the $695.9 billion deficit registered in 2008.
However, the large jump in the September deficit is likely to negatively impact the Commerce Department’s next reading of third quarter GDP. The agency’s preliminary reading showed 3.5 percent GDP growth.
