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The combined U.S. goods and services trade deficit jumped 8.56 percent on month in October, to $48.73 billion, on new record trade shortfalls in key sectors of the economy, and in trade flows heavily influenced by U.S. trade policy. The monthly manufacturing trade deficit soared 11.35 percent sequentially to $88.98 billion – an all-time high that topped the previous record by (set in August) by 8.35 percent. In high tech goods, the October trade gap rose on-month by 33.67 percent, to a record $13.82 billion, largely on unprecedented ($43.39 billion) monthly imports.

The real non-oil goods deficit – which can be considered “Made in Washington” because it entails commerce covered by free trade deals and other policy decisions, and which will weigh on the most closely followed GDP figures – hit $65.21 billion in October, 8.07 percent higher than September’s figure, and 3.85 percent greater than the previous (March, 2015) record of $62.80 billion. The non-oil goods gap also hit a record on a pre-inflation basis in October, as it rose 7.96 percent to $64.87 billion. That total topped the previous record ($61.74 billion, also set in March, 2015) by 5.07 percent.

October’s data also revealed new monthly all-time highs for services exports and imports – and each for the second straight months. The former rose 0.46 percent sequentially, from a downwardly adjusted $65.29 billion to $65.59 billion; and the latter rose by 0.69 percent, from an upwardly adjusted $44.93 billion to $45.24 billion.

Although the October China goods deficit was “only” the third highest monthly total on record ($35.23 billion), October U.S. goods imports from the PRC set new a monthly high of $48.20 billion. Ditto for merchandise imports from Mexico ($28.72 billion). The October trade report was also notable for revising the September total deficit sharply (3.20 percent) upward, from $43.50 billion to $44.89 billion. Most of this upgrade came in the services trade, where the September surplus estimate was pushed 7.03 percent higher.

Here are selected highlights of the latest monthly (October) trade balance figures released this morning by the Census Bureau:

>A series of new record trade gaps in key parts of the economy (notably manufacturing and high tech goods), and in trade flows strongly shaped by U.S. trade policy (notably, non-oil goods) helped widen the total U.S. goods and services trade deficit by 8.56 percent on month in October. The $48.73 billion figure was the highest such total since January’s $48.78 billion.

>The new manufacturing trade deficit set in October ($88.98 billion), eclipsed the previous record of $82.15 billion (set in August), by 8.31 percent. Sequentially, the manufacturing trade shortfall rose 11.35 percent.

>October manufacturing exports of $93.84 billion were 3.22 percent higher than September’s $90.92 billion total. But the much greater amount of imports rose more than twice as fast – 7.03 percent – and hit $182.83 billion.

>Year-to-date, the manufacturing trade deficit is running seven percent ahead of last year’s record total – which was an all-time high.

>On this basis, manufacturing exports have increased by 3.79 percent, and imports have risen by 5.24 percent.

>In high tech goods trade, the new October record deficit of $13.82 billion bested the old (November, 2016) mark of of $13.79 billion by just 0.21 percent.

>A 6.87 percent monthly rise in high tech goods exports, to a new record $43.39 billion, was largely responsible.

>This import jump also helped the trade deficit in this volatile category surge by 33.42 percent sequentially.

>High tech goods exports declined on month in October by 2.29 percent, to $29.57 billion.

>The high tech goods deficit is running 28.25 percent ahead of last year’s pace so far this year, and seems headed for a new annual record, too.

>America’s non-oil goods trade balances can be considered “Made in Washington,” because they exclude commerce in services and energy (where trade liberalization has made relatively few advances), and therefore include products whose trade performance is strongly affected by trade agreements and related policy decisions.

>The real non-oil goods trade balance is especially important, since it’s a component of the most closely followed (inflation-adjusted) gross domestic product (GDP) figures, and since its changes reveal whether trade policies are contributing to or subtracting from growth.

>So it can’t be good news that this chronic deficit hit an all-time high in October of $65.21 billion – 3.85 percent greater than the previous (March, 2015) record of $62.80 billion, and 8.07 percent higher than September’s $60.34 billion.

>As a result, unless the November and/or December figures decrease enough, the trade drag on the current economic recovery will rebound in the final quarter of 2017 after falling to 16.32 percent ($459.2 billion in lost real growth) according to the latest third quarter figures.

>The pre-inflation non-oil goods deficit hit a new record as well in October. The $64.87 billion total represented a 7.96 percent rise over September’s total, and a 5.07 percent increase over the previous record ($61.74 billion, also set in March, 2015).

>Other October records were set in monthly services exports and imports – and each represented a second-straight all-time high.

>Services exports in October rose by 0.46 percent on month, from a downwardly adjusted $65.29 billion to $65.59 billion; while imports increased by 0.69 percent, from an upwardly adjusted $44.93 billion to $45.24 billion.

>The massive, longstanding U.S. merchandise trade deficit with China did not set a record in October – although the $35.23 billion total was the third highest on record, and represented a 1.71 percent increase over September’s 6.74 percent figure.

>Yet U.S. goods imports from China did reach an all-time highs in October, rising 6.06 percent sequentially, to $48.20 billion – 5.19 percent greater than the previous $45.82 billion mark set in August.

>In October, America’s merchandise exports to the PRC did stay well below their monthly records, but still shot up 20.03 percent sequentially, to $12.97 billion.

>Year-to-date, the China goods deficit is running seven percent ahead of last year’s total – and 0.30 percent ahead of the January-October, 2015 rate, which eventually set the current annual record.

>U.S. merchandise imports from Mexico rose to an all-time high in October, too, with the $28.72 billion figure coming in 11.37 percent higher than September’s and 2.38 percent higher than the previous $28.05 billion record set in March.

>The U.S.-Mexico goods deficit – a prime target of President Trump’s trade policies – rose by 15.91 percent sequentially in October, as America’s goods exports rose on month by 10.08 percent to reach $21.11 billion. That represented their second best total ever after October, 2014’s $21.35 billion.

>Another prominent feature of the October trade report was a major (3.20 percent) upward revision in the September deficit – which is now judged to have been $44.89 billion instead of $43.50 billion. The new estimates were largely fueled by a 7.03 percent downgrading of the September services trade surplus, from $21.89 billion to $20.35 billion.

>Overall, the combined U.S. goods and services trade deficit is running 11.86 percent ahead of last year’s total, with total exports 5.32 percent higher and a 6.52 percent greater imports level.