By Martin Crutsinger
AP Economics Writer
WASHINGTON (AP) — The U.S. trade deficit widened in September as imports increased to the highest level in 10 months while exports slipped. The wider gap suggests growth was somewhat slower over the summer than previously estimated.
The deficit increased to $41.8 billion, up 8 percent from August, the Commerce Department said Thursday. It was the largest trade gap since May and marked the third straight month that the deficit has risen since hitting a four-year low in June.
Exports, which hit a record high in June, slipped for the third straight month, dipping 0.2 percent to $188.9 billion. Sales of commercial aircraft and autos both declined. Imports rose 1.2 percent to $230.7 billion, the highest level since November.
The deficit with China hit an all-time high of $30.5 billion.
The overall economy grew at an annual rate of 2.8 percent in the July-September quarter. An improving trade deficit contributed 0.3 percentage point to growth during that period.
But Thursday’s report shows that exports rose at a slower pace than the government estimated when it issued its report on third-quarter growth last week. That could wipe out trade’s contribution to growth, economists say, and lead the government to reduce its estimate of third quarter growth to an annual rate of 2.5 percent.
So far this year, the deficit is running 11.7 percent below the pace of 2012. A smaller trade deficit acts as a boost to economic growth when it shows American companies are earning more in their foreign sales and losing fewer domestic sales to foreign competitors.
Many economists say that growth has slowed in the current October-December quarter to perhaps below a 2 percent growth rate. They expect a rebound next year as the impact of this year’s tax hikes and government spending cuts lessen.