Deficit Hits $10.2 Billion as U.S. Imports Set Record

The nation’s merchandise trade deficit soared to $10.2 billion in October, the biggest imbalance in 10 months, as imports climbed to a record level, the government said today.

The Commerce Department said the October deficit was 19.8% higher than the September imbalance of $8.51 billion.

The worsening trade balance reflected a big jump in imports, which climbed 5.1% to an all-time high of $41.21 billion.

U.S. exports were also up, by 1.1%, rising to $31.01 billion. The trade deficit is the difference between imports and exports.

A worsening in the trade deficit had been expected, given that imports normally shoot up in October as merchants restock shelves in preparation for Christmas. The size of the increase, however, caught many economists by surprise.

For the first 10 months of the year, the U.S. merchandise trade deficit is running at an annual rate of $109.4 billion, down a modest 7.7% from last year’s deficit.

The overall October deficit of $10.2 billion was the largest since a $10.8-billion deficit last December.

At the White House, presidential spokesman Marlin Fitzwater said that, despite the October increase in the trade deficit, the deficit for January through October was $91.2 billion, “down $6 billion from the trade deficit for the first 10 months of 1988.”

“So it’s still moving in the right direction,” he said. “We’re doing exactly the right thing, and no changes are necessary at this time.”