The US trade deficit with the rest of the world dropped unexpectedly in October, by 7.6 percent, as a surge in exports offset a small increase in imports, official data showed Thursday. The goods and services trade gap totaled a seasonally adjusted $32.9 billion, down from a revised $35.7 billion in September, the Commerce Department said. Most analysts had forecast the deficit would rise to $36.8 billion. The politically sensitive trade deficit with China continued to widen, to $22.7 billion, its highest level in a year. The gap with China accounts for more than two-thirds of the US trade deficit. On an annual basis, the overall deficit narrowed 8.1 percent in October. Exports increased 2.6 percent to $136.84 billion. Imports rose 0.4 percent from September, to $169.78 billion, the highest level since December 2008. Imports of petroleum products tumbled 10 percent by volume, as the price of crude oil slipped slightly to $67.39 a barrel. The deficit in petroleum products stood at $17.8 billion, down 13.1 percent from the prior month September but still represented more than half of the US trade gap. With Canada, the nation's leading trade partner, the deficit rose to $2.0 billon as imports surged to a year-ago high. The gap with Japan increased slightly to $4.4 billion from $4.1 billion, while the deficit with the euro zone shrank to $3.8 billion, from $4.1 billion. Meanwhile, Canada posted a trade surplus of 428 million Canadian dollars (US$408 million) in October, as exports rose 3.4 percent and imports fell slightly by 0.8 percent, a government agency said Thursday. Strong gains in exports to the United States accounted for three-quarters of the increase and led the unexpected turnaround, said Statistics Canada. Canada had recorded an 850 million dollar (810 million US dollar) deficit in September - its seventh in the past 10 months. The rise in trade with the United States - Canada's largest trading partner - was the third advance in five months, noted Statistics Canada. Canadian exports of precious metals to the world rose 34 percent to a record high of 1.3 billion dollars (1.2 billion US dollars) in October, fueled by surges in gold prices and the demand for gold bars. Exports of copper ores and of other crude non-metallic minerals also posted solid gains. After three consecutive months of decline, energy exports rose 6.5 percent to 6.8 billion dollars (6.5 billion US dollars). Exports of agricultural and fishing products rose 2.9 percent to 2.8 billion dollars.
