The US trade deficit widened in October as exports slumped as a result of a slowdown in global demand, according to data released by the Commerce Department on Tuesday.
The trade gap increased 4.9 percent to $42.2 billion despite imports declining to the lowest level in 1 1/2 years, Reuters reported. Exports declined 3.6 percent, the biggest drop in nearly four years, which is likely to impact economic growth in the fourth quarter.
The trade gap for September was revised to $40.3 billion from $41.6 billion, said Reuters.
Bloomberg noted that the decrease in exports indicated that slowing economies in Europe and Asia may be lowering demand for American goods.
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The Wall Street Journal also noted that the trade deficit with China hit record levels ($29.5 billion) and fuel consumption and costs rose, negatively impacting the trade gap.
According to the Journal, exports to China spiked 23 percent, to $10.82 billion, but imports also expanded 6.5 percent, to $40.29 billion.
As the Associated Press explained, "A wider trade deficit acts as a drag on US growth. It typically means the US is earning less on overseas sales of American-produced goods while spending more on foreign products."
Despite the bleak news, the AP also pointed out that exports to the European Union rose 1.4 percent in October, and the US ran a $2.6 billion trade surplus with nations in South and Central America.
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