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Economy in Brief

U.S. Goods Trade Deficit Narrows in September from Record Gap
by Gerald D. Cohen  October 28, 2020

• 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.

Advance U.S. Foreign Trade in Goods (Customs Value $) Sep Aug Jul Sep Y/Y 2019 2018 2017
U.S. Trade Deficit ($ bil.) -79.37 -83.11 -80.01 -71.14
-854.37 -872.04 -792.40
Exports (% Chg) 2.7 3.0 12.1 -9.9 -1.4 7.7 6.6
Imports (% Chg) -0.2 3.3 12.4 -2.5 -1.6 8.5 7.0

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

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