Trade-offs

U.S. trade deficit unexpectedly shrinks to smallest since 2020

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% from the prior month to $52.8 billion, Commerce Department data showed Thursday. The median estimate in a Bloomberg survey of economists was for a $63.1 billion deficit.

The value of US exports rose 3% to the second-highest level on record, fueled by non-monetary gold and pharmaceutical preparations. Imports increased a more modest 0.6%, according to the Commerce Department, which noted that 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," Bloomberg analyst Mark Niquette said on the subject, "the September trade figures will help economists fine tune their estimates for third-quarter GDP."