Goods & Services Deficit Widened to $48.7 Billion in October

Statistics Canada says trade deficit narrows to $1.5 billion in October

The U.S. Chamber of Commerce said in a May report that they disagree "with the contention that the goods trade deficit is an appropriate gauge of whether a particular set of trade policies - or trade agreements - is delivering benefits to the American people more broadly".

Boosted by a weaker U.S. dollar, the October trade gap rose 8.6 per cent compared to September, to US$48.7 billion, the highest since January, surpassing analyst expectations for an increase of only 5.6 per cent.

Apart from the $1.5-billion increase in crude oil imports, the higher USA import bill was due to the highest on record imports of food, feeds, and beverages, and the highest on record non-petroleum imports.

The shortfall in goods and services trade, if sustained, may weigh on economic growth in the fourth quarter after net exports added 0.43 percentage point to gross domestic product in the previous three-month period. Exports increased $97.5 billion or 5.3%.

As a result, Canada's trade deficit shrank to a five-month low of C$1.47 billion ($1.17 billion) from C$3.36 billion in September, Statistics Canada said on Tuesday.

The Canadian dollar CAD=D4 initially edged up after the data, rising to C$1.2626 to the USA dollar, or 79.20 US cents, from C$1.2648, or 79.06 USA cents, before the data were released. He blames them on bad trade deals and abusive practices by China and other trade partners.

The trade deficit increased to the highest since January and was above expectations of a Reuters poll of economists who had predicted the October deficit would stand at $47.5 billion. Shipments from Mexico were also the highest ever, causing the USA gap with that country to expand in October.

The goods deficit with China increased from $34.6 billion in September to $35.2 billion in October.

Imports of mobile phones rose US$300 million as did transportation services.

Especially strong was the rise in energy exports, primarily to the U.S. Exports of gasoline blending stock were up 44.5 per cent and diesel and fuel oils exports rose 18.4 per cent after a recent drawdown in U.S. inventories of refined petroleum products.

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