Trade Gap Widened by 15% in September --- As U.S. Economic Growth Outpaces Rest of World, Exporters Feel a Pinch
WASHINGTON -- The trade deficit exploded to a record in September, as Americans continued to soak up imported goods and U.S. exporters were hurt by damped economic growth overseas.</br></br>The gap between exports and imports hit $34.3 billion, almost 13% wider than economists had expected for the month and 15% larger than the revised $29.8 billion deficit posted in August, the Commerce Department reported.</br></br>The result of weaker exports is slower overall growth in the U.S., with economists now estimating that gross domestic product rose at a 2% annualized rate in the third quarter of the year, not the 2.7% the government previously had calculated. That would be the slowest growth rate since the U.S. economy limped ahead 0.8% in the second quarter of 1995.</br></br>Nonetheless, the U.S. economy grew at an estimated 5.2% rate for the year ended Sept. 30. And even the reduced third-quarter pace in the U.S. is stronger and more consistent than the growth rates of its big overseas business partners. European growth has slowed recently, while Japan's perennially sluggish economy still hasn't gotten much traction.</br></br>"You have U.S. growth continuing to outpace the rest of the world," said Gerald D. Cohen, senior economist at Merrill Lynch & Co. in New York, adding, "If we grow faster than our major trading partners, we'll pull in more imports than we export."