The U.S. trade deficit recorded its biggest increase in more than 1-1/2 years in October as exports of soybeans and other products fell, suggesting trade would be a drag on growth in the fourth quarter.
The Commerce Department said on Tuesday the trade gap rose 17.8 percent, the largest increase since March 2015, to $42.6 billion. Higher imports due to rising domestic demand also contributed to the widening of the deficit.
Exports contributed 0.87 percentage point to the third quarter's 3.2 percent annualized rate of increase in gross domestic product. The jump in exports in the last quarter largely reflected a surge in soybean shipments to China after a poor harvest in Argentina and Brazil.
Imports from China hit their highest level in a year. With exports outpacing imports, the politically sensitive U.S.-China trade deficit fell 4.2 percent to $31.1 billion in October.
