US trade gap shrinks to smallest since 2009 on imports drop
The goods and services trade gap shrank 39% from the prior month to US$29.4 billion
[WASHINGTON] The US trade deficit unexpectedly narrowed in October to the smallest since 2009 on a sharp pullback in imports.
The goods and services trade gap shrank 39 per cent from the prior month to US$29.4 billion, Commerce Department data showed Thursday (Jan 8). The median estimate in a Bloomberg survey of economists was for a US$58.7 billion shortfall. The report was delayed for over a month because of the federal government shutdown.
Imports decreased 3.2 per cent, reflecting declines in inbound shipments of medication and non-monetary gold. The value of US exports rose 2.6 per cent in October. The figures aren’t adjusted for inflation.
There have been large monthly swings in trade this year related to US implementation of tariffs. In particular, there’s been a surge in trade of non-monetary gold and pharmaceutical preparations in recent months in response to President Donald Trump’s vacillating tariff announcements.
Imports of pharmaceutical preparations dropped sharply in October to the lowest since July 2022 after surging a month earlier.
The trade volatility has also affected the government’s measure of economic activity – gross domestic product. Before the latest trade report, the Federal Reserve Bank of Atlanta’s GDPNow forecast net exports would subtract 0.3 percentage point from fourth-quarter growth. In the third quarter, they added 1.59 percentage points.
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Trade in gold, unless used for industrial purposes such as in the production of jewellery, is excluded from the government’s GDP calculation. BLOOMBERG
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