The U.S. trade deficit in September shrank significantly, unexpectedly hitting its smallest level since mid-2020, primarily driven by a surge in exports. Data released by the Commerce Department on Thursday showed the goods and services trade deficit narrowed by nearly 11% month-over-month to $52.8 billion, well below the market expectation of $63.1 billion.
The figures revealed a 3% increase in total U.S. exports, reaching the second-highest level on record, with strong contributions from non-monetary gold and pharmaceutical products. Meanwhile, imports rose modestly by just 0.6%. The data was not adjusted for inflation.
This year, trade volatility due to U.S. tariff policies has introduced significant uncertainty into monthly import-export fluctuations, impacting GDP calculations. The latest trade data will help economists refine their third-quarter GDP forecasts. Before the report, the Atlanta Fed's GDPNow model projected net exports would add 0.86 percentage points to Q3 economic growth.
After inflation adjustments, the U.S. goods trade deficit in September narrowed to $79 billion, the lowest in nearly five years. Notably, inflation-adjusted consumer goods exports hit a record high.
Sector-specific data showed a rebound in pharmaceutical imports, while capital equipment and automotive imports declined. Most consumer goods imports also weakened, including mobile phones, appliances, toys, and furniture.
A key highlight was the record-high export value of non-monetary gold in September, nearly offsetting the earlier import surge triggered by tariff concerns. A month earlier, U.S. gold imports from Switzerland spiked sharply after tariff hikes but later retreated.
Overall, September’s trade data reflected robust exports and subdued imports, potentially providing additional support for Q3 economic performance. However, it also underscored the ongoing short-term disruptions from tariff policies on trade patterns.
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