U.S. trade deficit widens to $78.2 billion in October

The nation's trade deficit rose 5.4% in October to a four-month high of $78.2 billion, reflecting a decline in appetite for American goods and services as the global economy weakens.

Economists polled by The Wall Street Journal predicted a $80 billion shortfall.

The deficit widened from $74.1 billion in September, the government said Tuesday.

Exports fell for the second month in a row after reaching a record high in August. They fell by 0.7% to $256.6 billion.

Exports have been hurt by slower economic growth in other countries and a strong dollar that has made American goods and services more expensive.

The falling cost of oil has resulted in a decrease in the amount of money generated by U.S. energy producers. The softer economic growth tends to depress demand for oil and gas.

In October, the value of energy exports declined, as did shipments of Covid-related drugs and consumer goods.

Imports rose by 0.6% to $334.8 billion, but they are well off March's all-time high. Americans are spending less on goods and minding their money because of talk of a recession.

In October, the U.S. imported more oil, metals and nuclear materials.

The trade deficit has had an unusually large effect on gross domestic product this year, the official scorecard of the economy.

A record gap in GDP caused a decline in the first quarter. Then a shrinking deficit gave a huge boost to third-quarter economic growth.

The big picture: Chronically high U.S. trade deficits rarely tell us much about the health of the economy, but the details of the report are sometimes telling.

Demand for business goods and services has gotten softer at home and abroad, according to what they are telling us.

The central banks around the world fight high inflation with the help of rising interest rates, leading to weaker economic growth.

Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said trade flows are likely to slow as monetary policy actions in the world weigh on demand.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were due to open in trading on Tuesday. On Monday, the stock price fell.