The U.S. trade deficit contracted sharply in September as foreign companies snapped up American-made goods, helping the economy rebound from an ugly first half of the year.
The trade gap in goods and services shrank 9.9% from a month earlier to $36.44 billion, the smallest deficit since February 2015, the Commerce Department said Friday. Exports rose 0.6% while imports decreased 1.3%.
The gap was smaller than the projected $37 billion deficit in a Wall Street Journal survey of economists. The positive development mainly reflected higher sales abroad of products like airplanes, industrial engines and artwork.
Stronger exports helped the economy grow at a solid 2.9% pace over the summer, but some economists don’t expect the trend to continue. Exports were helped in part by a boost in soybean sales that has faded, and economic growth around the globe remains choppy.
“The one-off surge in soybean exports will not be repeated in coming quarters, and growth in many of America’s major trading partners remains lackluster,” Wells Fargo economist Jay Bryson said in a note to clients. He expects the trade gap to restrain the economy’s growth rate in coming months.
Last month’s decline in imports reflected reduced purchases in the U.S. of foreign goods like civilian aircraft and pharmaceutical products. Imports also fell because a temporary factor: Olympic broadcast rights had boosted charges for the use of intellectual property in August.
The rise in exports suggests U.S. manufacturers are regaining stability after a choppy year marked by weak business spending at home, a strong dollar and sluggish demand abroad.
View Article