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US Goods Trade Deficit Narrowed in October as Imports Plunged

Nov. 26, 2019
The latest figures show how trade might impact fourth-quarter GDP.

The U.S. merchandise-trade deficit unexpectedly narrowed to the lowest in more than a year as imports plummeted, signaling the impact of tariffs on shipments.

The gap decreased to $66.5 billion in October from $70.5 billion the prior month, Census Bureau data showed Tuesday. That compared with forecasts of a widening to $71 billion. Exports of goods eased to $135.3 billion, down $0.9 billion from September. Imports dropped to a two-year low of $201.8 billion.

Key Insights

  • The latest figures offer a glimpse of how trade may impact gross domestic product in the fourth quarter.
  • U.S. trade with China has suffered as President Donald Trump ratcheted up tariffs on imports from the Asian nation, which retaliated with its own levies on U.S. goods since 2018.
  • The report comes as the world’s two biggest economies edge closer to a partial deal to avert steeper tariffs that the U.S. has threatened on Chinese goods.

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  • The report also showed wholesale inventories advanced 0.2% in the month as retail inventories rose 0.3%. Analysts look to these numbers to adjust estimates for economic growth during the quarter.
  • Exports and imports of goods account for about three-fourths of America’s total trade; the U.S. typically runs a deficit in merchandise and a surplus in services.
  • Tuesday’s figures cover goods only. The Commerce Department will release full October data for international trade Dec. 5, including services and more details on merchandise shipments.
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