October Exports Reach $115.3 Billion as Strong Exports Coexist With Weak Domestic Demand
Exports reached $115.3 billion in October, the second-highest total on record. Cumulative exports for the year reached $930 billion, raising the likelihood that the annual total will surpass $1 trillion in November. Semiconductor exports rose 259% year over year to $56.4 billion.
DRAM exports hit a record, while exports of MLCCs and PCBs also performed well. Non-semiconductor products, including large power transformers, instant noodles and cosmetics, also contributed to export growth. Semiconductors and SSDs accounted for 53.8% of total exports in October, down from 55.4% in September, while exports excluding semiconductors also showed a recovery from their August low.
Whether strong exports translate into improvements in household conditions and domestic demand remains a separate challenge. Retail sales returned to decline after five quarters, while durable-goods sales fell about 7% year over year on a quarterly basis and passenger-car sales dropped 11%. One explanation was that the base effect from household recovery coupons had faded and more individuals were cutting consumption after losses on stock investments.
Concerns were also raised that export growth was not being fully reflected in stock prices or domestic demand. One outlook held that a key factor for the 2027 economic outlook would be whether export gains spread to household income and consumption through wages and dividends. It was also noted that improvements in corporate earnings may take time to translate into performance bonuses and dividends.