Trade Deficit Jumps the Most in a Decade

Published on Friday, 13 November 2009 09:19 Written by Danny Miller

Washington, Nov. 13 (TradersHuddle.com) – The U.S. Commerce Department reported that September’s trade deficit increased the most in a decade, due to higher oil and imported automobiles demand. The higher demand came after the economy rebounded from the worst recession in decades.

The deficit grew a larger-than-anticipated 18% to $36.5 billion, the highest level since January, from a revised $30.8 billion in August. Even as the Dollar weakened, imports surged by the most in 16 years, overshadowing a gain in exports.

Demand for imported product has the potential to remain at elevated levels as companies are replenishing inventories across the supply chains and especially ahead of the holiday shopping season, in addition consumer and business demand may inch higher as the recovery grabs hold.

Exports in the other hand, has the potential to increase as the weak greenback makes U.S. manufactured goods more competitive, especially in the Asian expanding economies.

The Dollar dropped after the report. The euro was up 0.2% in New York, and the S&P 500 futures pointed to a higher open.