“The private sector is doing fine,” Barack Obama assured us in June, but we haven’t seen much evidence for that argument.  Today’s report from Commerce on the trade deficit certainly doesn’t provide any reassurance for that claim.  In fact, exports dropped in October by the biggest margin since Obama took office, and the trade gap with China widened to a new record:

The U.S. trade deficit widened in October as exports suffered the biggest drop in nearly four years, indicating slowing global demand is likely to weigh on U.S. economic growth in the fourth quarter.

The Commerce Department said on Tuesday the trade gap increased 4.9 percent to $42.2 billion even as imports declined to the lowest level in 1-1/2 years. September’s trade gap was revised to $40.3 billion from the previously reported $41.6 billion.

Economists polled by Reuters had expected the trade deficit to rise to $42.6 billion in October. The wider trade gap in October reflected a 3.6 percent fall in exports of goods and services to $180.5 billion. That was the biggest percent drop in exports since January 2009.

Exports have been one of the pillars supporting the economy since the 2007-09 recession ended. The pull back was telegraphed by weak manufacturing surveys and reflects slowing global demand, especially in China and debt-ridden Europe.

The Associated Press reports on the China trade gap, but also suggests that Hurricane Sandy might be to blame for at least a portion of the decline in exports:

Exports dropped 3.6 percent to $180.5 billion. Sales of commercial aircraft, autos and farm products all declined.

Imports fell 2.1 percent to $222.8 billion, reflecting fewer shipments of cell phones, autos and machinery.

The trade gap with China also increased to a record high, which will keep pressure on the Obama administration. Manufacturers and U.S. lawmakers have complained about China’s use of unfair trade practices.

Paul Dales, senior U.S. economist at Capital Economics, said the decline in both exports and imports likely reflected some disruptions from Superstorm Sandy. The storm closed ports in the Northeast for the last few days of October. Exports should rebound in November, although Dales expects the longer-run trend to stay negative.

“The bigger issue is that the weak global economy has been taking its toll on exports,” Dales said, predicting that trade would drag slightly on overall U.S. growth in 2013.

While the storm may have impacted these numbers, the CNBC analysis shows that the decline was not unexpected.  And if the storm disruptions had an outsize impact on October’s numbers, it will likely be worse in November, which is when most of the storm’s impact took place.  Don’t forget, too, that the West Coast ports got partially shut down last month in a labor dispute, which means that we’re likely to see even more decline in November.

So far, the fourth quarter is off to a poor start.

Update: The poor start applies to wholesale figures, too:

Sales. The U.S. Census Bureau announced today that October 2012 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $408.5 billion, down 1.2 percent (+/-0.7) from the revised September level, but were up 2.3 percent (+/-1.1%) from the October 2011 level. The September preliminary estimate was revised downward $0.5 billion or 0.1 percent. October sales of durable goods were down 0.9 percent (+/-1.1%)* from last month, but were up 1.5 percent (+/-1.4%) from a year ago. Sales of motor vehicle and motor vehicle parts and supplies were down 3.1 percent from last month. Sales of nondurable goods were down 1.4 percent (+/-1.2%) from September, but were up 3.0 percent (+/-1.4%) from last October. Sales of petroleum and petroleum products were down 5.7 percent from last month.

Inventories. Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $497.1 billion at the end of October, up 0.6 percent (+/-0.4%) from the revised September level and were up 6.6 percent (+/-1.1%) from the October 2011 level. The September preliminary estimate was revised upward $0.2 billion. October inventories of durable goods were up 1.0 percent (+/-0.4%) from last month and were up 8.4 percent (+/-1.1%) from a year ago. Inventories of computer and computer peripheral equipment and software were up 3.0 percent from last month and inventories of lumber and other construction materials were up 1.8 percent. Inventories of nondurable goods were down 0.1 percent (+/-0.9%)* from September, but were up 4.0 percent (+/-2.1%) from last October. Inventories of petroleum and petroleum products were down 3.1 percent from last month.

Inventories/Sales Ratio. The October inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.22.  The October 2011 ratio was 1.17.