US September trade gap narrows to $105 billion as imports hit a record

The US trade deficit was $105 billion in September, down 0.7% from August, against economists' expectations for a wider gap. The deficit is the amount by which imports exceed exports.^[1]

At the same time, robust US domestic demand pushed imports to a record high.^[2]

Import demand directs US buyers' spending toward overseas suppliers and businesses selling imported products to American customers. If that demand persists, it supports their orders and sales. A record import bill alone does not establish that every product category is seeing higher sales volumes or profits.^[2]

The narrower gap also gives a more favorable signal for growth accounting: gross domestic product, or GDP, measures production within the US, adding exports and subtracting imports. Monthly trade values alone cannot establish trade's contribution to inflation-adjusted quarterly GDP growth.^[1]

Impact

• Suppliers of imported products to the USOpportunity

  Overseas producers and import distributors can plan supply around US demand, with record imports offering a positive signal for orders. Benefits still depend on product-level demand, purchasing costs and selling prices; the aggregate figures do not establish individual companies' earnings.^[2]

What to watch next

• The November 6 US October employment report: job and wage growth will help show whether household income can keep supporting demand, including for imported products.