U.S. Trade Deficit Reaches Ten-Year High in October

​Last week saw the Bureau of Labor Statistics release nonfarm payroll figures that fell well short of expectations and pulled the three-month average to a 12-month low. Further, the unemployment stayed the same for the third straight month at 3.7%, and wage growth was at 3.1% for the second straight month. The total net worth among U.S. households broke to a record high in the third quarter after a 1.9% rise in net asset values. Last, the Commerce Department released October’s trade deficit report, showing the foreign trade gap widen by 1.7% to a ten-year high.

• The Bureau of Labor Statistics released its monthly employment situation report for November, showing slower hiring and another month at a 3.7% unemployment rate. Nonfarm payrolls increased by 155,000 in the month, well below the 198,000 forecasted and the 170,000 three-month average, which was the slowest three-month rate in a year. Further, wage growth matched October’s 3.1% year-over-year gain. The low job additions can be attributed to two factors. First, a recent hiccup in the economy and stock market could have consumers demanding less goods and services and, therefore, employers don’t need as many new hires. Second, slow hiring might be a function of the low unemployment rate, where employers cannot find workers to fill the new openings.

• The total net worth among U.S. households broke to record highs in the third quarter as elevated property values and booming stock prices padded consumer accounts. In the year’s penultimate quarter, the value of household assets, net of liabilities, rose by $2.07 trillion dollars, a 1.9% increase from the prior quarter. Net household wealth now stands around $109 trillion dollars. Also, households’ net worth reached seven times disposable income and household debt rose at a 3.4% pace, compared with 2.9% in the second quarter.

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• According to a report released by the Commerce Department, the U.S. trade deficit reached a ten-year high in October. The foreign trade gap in goods and services expanded at a monthly 1.7% rate to a seasonally adjusted $55.5 billion, the largest since October 2008. While imports grew 0.2% and exports fell 0.1%, a combination of escalated trade disputes and tax-cut-fueled domestic demand have slowly been stretching the trade gap.