By Nick Timiraos
The U.S. trade gap widened in September as exports fell to a
five-month low, a sign of weaker demand for U.S.-made goods that
underscores concerns about a global economic slowdown.
The trade deficit rose 7.6% to a seasonally adjusted $43 billion
in September from the prior month's deficit of $40 billion, the
Commerce Department said Tuesday. Exports decreased 1.5% from
August while imports were almost unchanged.
The report showed softer demand for U.S. goods such as
industrial supplies and autos. The figures prompted many economists
to trim their forecasts for growth in the third and fourth
quarters.
Nonpetroleum imports rose to their highest level on record,
boosted by a nearly $2 billion jump in imports of cellphones that
economists said likely reflected the introduction of Apple's iPhone
6. Lower energy prices sent petroleum imports to their lowest level
in nearly five years.
The Commerce Department reported last week that gross domestic
product, the broadest measure of goods and services produced across
the economy, expanded at a 3.5% annual rate during the third
quarter.
That estimate was based on projected figures for Tuesday's trade
report. Commerce will revise its third-quarter GDP estimate,
incorporating the new September trade numbers, later this month.
The initial GDP estimate showed that exports boosted GDP growth by
more than one percentage point while a drop in imports added 0.3
percentage point to growth.
Tuesday's trade report prompted economists at Morgan Stanley,
Macroeconomic Advisers and Royal Bank of Scotland to cut their
third-quarter growth estimates to 3%. Economists also could begin
to reduce their fourth-quarter forecasts to around 2% from 3%, said
analysts at Mizuho Securities.
The report highlights concerns about how the U.S. economy will
fare if the dollar continues to strengthen against foreign
currencies and if growth slumps in Europe and Asia. Many economists
expect trade to drag on growth through the middle of next year
because a stronger dollar makes U.S. goods more expensive overseas,
denting exports.
Exports to Europe swung from a 4.6% increase in August to a 7%
drop in September, the lowest level since February 2013. Exports to
China swung from a 3% increase in August to a 2% drop in September,
the lowest since last December.
"Exports looked weak across the board," said Michelle Girard,
chief U.S. economist at RBS. While analysts might attribute
September's drop to a stronger dollar, "the lags between currency
appreciation and weaker exports tend to be longer," she said in a
note to clients Tuesday.
Meanwhile, imports from China rose 13% to an all-time high, and
the trade deficit with China hit $35.6 billion in September, also a
record.
Exports have increased this year because of a domestic
energy-production boom from North Dakota to Texas aided by advanced
drilling techniques such as hydraulic fracturing. But falling oil
prices have raised questions about the pace of investment in the
domestic energy sector.
Oil prices fell Monday to their lowest point in more than two
years after Saudi Arabia cut prices for crude sold to the U.S.,
which could pave the way for future price declines and put pressure
on U.S. energy producers.
Petroleum imports fell 3.2% in September to $26.4 billion, the
lowest level since November 2009. Exports of petroleum fell 12.5%
to $12.4 billion, the lowest level since April.
Write to Nick Timiraos at nick.timiraos@wsj.com