Economic Report: U.S. trade deficit in goods falls 5.7% in October to a 17-month low

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The numbers: An early look at U.S. trade patterns in October showed a nearly 6% decline in the nation’s trade deficit in goods. The gap was the lowest level in 17 months, but the U.S. is still likely to post the biggest deficit in 2019 in 11 years.

The trade deficit in goods fell to $66.5 billion in October from a revised $70.5 billion in the prior month, the government said Tuesday.

Economists surveyed by MarketWatch had forecast a $71.8 billion deficit.

The advanced report also revealed an 0.2% increase in wholesale inventories and a 0.3% gain in retail inventories.

Read: Wall Street doubts grow as U.S. and China struggle to finish off ‘skinny’ trade deal

What happened: Imports of foreign-made goods declined by $5 billion to $201.8 billion in October, perhaps reflecting a recent pattern of up-and-down figures depending on the timing of new U.S. tariffs on China. Companies rush to buy imports before tariffs go into effect and cut back later on.

Exports of U.S. goods slipped by a smaller $900 million to $135.3 billion.

Most trading between countries involves goods such as autos, airplanes, oil, chemicals, electronics, clothing and the like.

The full October trade report comes out next week and includes services. The U.S. has run a surplus for years in services such as banking, tourism and entertainment, but they reflect a small portion of trade. The services balance doesn’t change much from month to month.

In September the total U.S. trade deficit was $52.5 billion.

Read: U.S. tariffs on China have oddly little effect on import prices. What’s going on?

Big picture: The U.S. has run large trade deficits for years and nothing has really changed despite on-and-off efforts to reduce them. Even though Trump administration tariffs have caused Chinese imports to decline, imports from other countries have risen.

Higher deficits subtract from gross domestic product, though rising inventories add to GDP.

Market reaction: The Dow Jones Industrial Average DJIA, +0.68% and S&P 500 SPX, +0.75% were set to open mildly higher in Tuesday trades.

Read: It’s great the stock market is setting records, but it’s not because economy is great

The 10-year Treasury yield TMUBMUSD10Y, -1.27% dipped to 1.74%.