US and Japanese data show greater trade imbalances, inflationary pressures

The US trade deficit widened in October. MarketWatch reports:

The nation's trade deficit widened 1.2% in October to $57.8 billion from a revised $57.1 billion in September, the Commerce Department said.

This is the biggest trade gap since July. Read full report...

The lion's share of the deterioration in the trade gap was due to sharp increases in the quantity and price of petroleum imports.

The non-petroleum deficit narrowed 2.9% in October to $38.5 billion for the fourth-straight monthly improvement. This is the lowest level since March 2004...

Exports rose 0.9% to $141.7 billion in October. Imports rose 1% to $199.5 billion.

Brad Setser notes the divergence in the oil and non-oil deficits too, stating that the overall improvement in the trade deficit recently "stems much more from a slowdown in non-oil import growth" rather than a major acceleration in export growth. In addition, US imports from China are "growing far faster than US non-oil imports", indicating that the increase in imports from China is coming at the expense of imports from the rest of Asia.

The rising Chinese share of US non-oil imports didn't stop Japan's surplus from rising in October though. From Bloomberg yesterday:

Japan's current-account surplus widened for a 10th month in October as automobile exports surged and investors earned more from overseas assets.

The surplus expanded 45.7 percent to 2.23 trillion yen ($20.1 billion) from a year earlier, the Finance Ministry said in Tokyo today...

Export growth accelerated to 13.7 percent in October from a year earlier to 7.11 trillion yen, the ministry said. Imports climbed 8.3 percent to a record 5.95 trillion yen.

Meanwhile, data for November in both the US and Japan indicate that inflationary pressures still exist.

Data released by the Labor Department yesterday showed that US import prices surged 2.7 percent in November, mainly due to higher prices for petroleum and natural gas. But even excluding fuels, import prices rose 0.5 percent.

Meanwhile Japan's wholesale prices rose 2.3 percent in November from a year earlier based on the corporate goods price index, the sharpest annual jump since September 2006.