Trade Deficit in Goods Contracts in September, With Rising Exports and Lower Imports

In the United States we have seen nothing but net trade deficits for many years. This is the case in goods due to how much we import. Now we have a report from the Census Bureau showing the advance report for international trade, wholesale inventories and retail inventories advance statistics for September 2016.

The goods deficit was down 5.6% to $56.1 billion in September. Bloomberg was calling for a $60.5 billion deficit, and its Econoday range was −$64.8 billion to −$58.0 billion. The report for August was also revised to −$59.1 billion from −$58.4 billion.

In short, the deficit was narrower than expected and narrower than the prior month, despite a higher revision.

What matters here is that this is just a partial report on the total trade deficit. This measures the goods imported and exported in and out of the United States and its territories.

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Exports of goods for September were $125.6 billion, a gain of $1.1 billion over August’s exports. Imports of goods for September were $181.7 billion, a drop of $2.0 billion from August’s imports. Even with a strong dollar, this means that imports were down and exports were up.

This may also set up for a slight positive to this Friday’s first look at third-quarter gross domestic product (GDP). Imports subtract from GDP and exports add to it.

Wholesale inventories for September were estimated at an end-of-month level of $590.7 billion, up 0.2% from August 2016, on a seasonally adjusted basis. They were listed as being virtually unchanged from September 2015.

Retail inventories for September were estimated at $607.6 billion, up 0.3% from August 2016, on a seasonally adjusted basis. This was actually shown to be up 4.0% from September 2015.

Exports of capital goods were up almost 4%, and exports of consumer goods were up 4.4%. Exports of industrial supplies rose by over 2%.

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