Lucia Mutikani

7 MIN READ

WASHINGTON (Reuters) - The U.S. trade deficit jumped to a 10-year high in October as soybean exports dropped further and imports of consumer goods rose to a record high, suggesting the Trump administration’s tariff-related measures to shrink the trade gap likely have been ineffective.

FILE PHOTO: A ship is unloaded using Super Post Panamax cranes in Miami, Florida, U.S., May 19, 2016. REUTERS/Carlo Allegri/File Photo

Other data on Thursday showed private employers hired fewer workers than expected in November, pointing to a moderation in the pace of job growth. That was reinforced by another report showing a small decline in the number of Americans filing claims for unemployment benefits last week.

The reports added to weak housing and business spending on equipment data in signaling a slowdown in economic growth. Concerns over the health of the economy have roiled financial markets in recent days.

The Commerce Department said the trade deficit increased 1.7 percent to $55.5 billion, the highest level since October 2008. The trade gap has now widened for five straight months. Data for September was revised to show the deficit rising to $54.6 billion instead of the previously reported $54.0 billion.

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The politically sensitive goods trade deficit with China surged 7.1 percent to a record $43.1 billion in October.

The United States is locked in a bitter trade war with China. Washington has imposed tariffs on $250 billion worth of Chinese imports to force concessions on a list of demands that would change the terms of trade between the two countries.

China has responded with import tariffs on U.S. goods, including soybeans. President Donald Trump has long railed against China’s trade surplus with the United States, and accuses Beijing of not playing fairly on trade.

In addition to the duties on Chinese goods, Washington has slapped tariffs on steel and aluminum imports into the United States this year. On Saturday, Trump and Chinese President Xi Jinping agreed to hold off on imposing more tariffs for 90 days while they negotiate a deal to end the trade dispute.

The truce appeared to be in doubt on Thursday following the arrest in Canada for extradition to the United States of Meng Wanzhou, the chief financial officer of Chinese technology giant Huawei Technologies Co Ltd and the daughter of its founder.

“We remain skeptical of a substantial trade deal,” said Jake McRobie, a U.S. economist at Oxford Economics in New York.

Economists polled by Reuters had forecast the overall trade deficit rising to $55.0 billion in October. When adjusted for inflation, the goods trade deficit increased to $87.9 billion in October from $87.2 billion in September. The so-called real trade deficit is above the average for the third quarter.

Trade subtracted 1.91 percentage points from GDP growth in the July-September quarter. Growth estimates for the fourth quarter are around a 2.8 percent annualized rate. The economy grew at a 3.5 percent pace in the third quarter.

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