• Trade deficit decreased to $79.4 billion in September from a record $83.1 billion.

• Exports grew by 2.7% while imports declined 0.2%.

• Exports still 11.4% below February 2020 level. Imports up 2.4%.

The advance estimate of the U.S. trade deficit in goods unexpectedly narrowed to $79.37 billion in September from a record $83.11 in August (the August figures as well as the month-on-month and year-on-year comparisons below are based on revised data from the monthly International Trade Report; updated September figures will be released next week). The Action Economics Forecast Survey anticipated an $85.4 billion deficit.

Exports grew 2.7% on the month (-9.9% year-on-year) while imports edged down 0.2% (-2.5% y/y). Despite the growth gap, the trade deficit didn't narrow more because imports are roughly 70% larger than exports. This leaves exports 11.4% below their February level and 14.5% from the May 2018 peak. Meanwhile, imports are up 2.4% from February, but 7.3% below their October 2018 peak.

Five out of the six major categories of exports -- which is the only data available in the Advance Trade report -- grew. Exports of industrial supplies, which vies with capital goods to be our largest export category declined 0.8% (-11.4% y/y). Capital goods were up 3.6% (-16.3% y/y), The trend in import categories were split down the middle. Imports of nonfood consumer goods, fell 4.0% (+2.0% y/y) while capital goods, the second largest import category and an indicator of capital spending, grew 1.4% (-1.0% y/y).

The advance international trade data can be found in Haver's USECON database. The expectation figure is from the Action Economics Forecast Survey, which is in AS1REPNA.

Note: Current month is based on Advance Trade data; Previous months reflect revised data from International Trade release.