U.S. trade deficits continue to grow
The U.S. trade and current account deficits are at their deepest level since 2008.
Why it matters: America's underwater trade position was one of the defining complaints of Donald Trump's 2016 presidential campaign, and the Trump administration has spent the past four years waging trade wars in a futile or even counterproductive attempt to turn it around.
By the numbers: America's trade deficit was $63 billion in October, according to the Census Bureau, while the broader current account was in deficit to the tune of $179 billion in the third quarter, according to the Bureau of Economic Analysis.
The big picture: The main reason for the weakness of the dollar is just that America is shipping a lot of money overseas to pay for goods and services from abroad. Meanwhile, the coronavirus has cratered demand from foreigners for everything from aircraft to American vacations.
- Even after the coronavirus recedes, however, the weak dollar is probably here to stay. The main thing that would reverse the trend would be rate hikes from the Federal Reserve, and Fed chair Jay Powell has made it clear that's not going to happen in the foreseeable future.
The bottom line: The trade deficit is in many ways a sign of strength — an indication that the world is eager to sell us trillions of dollars worth of valuable goods and services, in return for nothing but greenbacks. But it still counts as a major policy failure for the Trump administration.