US trade deficit unexpectedly shrinks to smallest since 2020

[WASHINGTON] The US trade deficit unexpectedly narrowed in September to the smallest since mid-2020 as exports surged.

The goods and services trade gap shrank nearly 11 per cent from the prior month to US$52.8 billion, Commerce Department data showed on Thursday (Dec 11). The median estimate in a Bloomberg survey of economists was for a US$63.1 billion deficit.

The value of US exports rose 3 per cent to the second-highest level on record, fuelled by non-monetary gold and pharmaceutical preparations. Imports increased a more modest 0.6 per cent. The figures aren’t adjusted for inflation.

Large monthly swings in trade this year related to US implementation of tariffs have introduced similar volatility in the government’s measure of economic activity – gross domestic product. The September trade figures will help economists fine tune their estimates for third-quarter GDP.

Prior to the monthly report, the Federal Reserve Bank of Atlanta’s GDPNow forecast saw net exports contributing 0.86 percentage point to third-quarter growth. BLOOMBERG