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.
- 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.
- 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.