The U.S. trade deficit widened nearly 9% to a record $55.5 billion in October, the government reported Tuesday, raising further concerns about the nation's habit of buying more from foreigners than it sells to them.
The larger-than-expected gap, fueled by surging oil prices and record imports from China, also suggested that U.S. economic growth might not be as strong as believed.
Although exports in October grew to a record -- thanks partly to the weak greenback, which made U.S. goods cheaper overseas -- imports jumped even more.
If the trend continues, the U.S. will continue to run up larger debts to foreigners, threatening its future financial health, some experts said. That could lead to further declines in the dollar, whose slide has accelerated in recent weeks amid worries about swelling U.S. trade and budget deficits.
Many experts said they saw no end in sight.
"We're likely to see large trade deficits for months, if not years, into the future," said Steven Wood, chief economist at Insight Economics in Danville, Calif. "We Americans continue to have a huge appetite for foreign-made goods and services."
With imports 50% larger than exports, it will take a long time to reverse the imbalance, Wood added.
It's not that American exporters aren't doing their part.
"We're in a massive hiring mode," said Gary Johnson, vice president of Ace Clearwater Enterprises, an aerospace parts supplier in Torrance that is enjoying strong demand for its aircraft components from Europe's Airbus, and for its gas turbines from India and Southeast Asia.
Ace is seeking more skilled welders, engineers and machinists, and so are other manufacturers.
"People are picking off employees," Johnson said.
Unfortunately for the trade picture, mounting exports by companies like Ace aren't enough to offset rising imports. One reason: the U.S. is simply growing faster -- and thus buying more -- than most other developed nations. Economic growth in Germany and Japan, for example, has been slowing.
And it doesn't help that people in the U.S. are spending like there's no tomorrow. Americans' savings rate in October dropped to 0.2% of disposable income, its second-lowest level ever. By contrast, Europeans save as much as 10% of their take-home pay, while the Japanese sock away 11% to 12%, economist Wood said.
The bottom line, he said: "They lend to us, and we borrow and spend it."
