US goods trade deficit rises to the highest in 2 ½ years in September

The US trade deficit in goods surged to a 2.5-year high in September, reaching $108.2 billion, as reported by the Commerce Department’s Bureau of Economic Analysis.
This 14.9% increase in the trade gap, the largest since March 2022, reflects a significant uptick in imports, driven primarily by strong domestic demand and inventory stockpiling by businesses.
Many companies appear to have accelerated imports amid concerns about potential supply chain disruptions from a dockworkers strike, which ultimately proved short-lived. In response to these developments, some economists have scaled back their projections for US GDP growth in the third quarter.
September saw a 3.8% increase in goods imports, totaling $282.4 billion, also the highest in 2.5 years. Imports of consumer goods, food products, and capital goods all saw strong gains, with consumer goods alone jumping by 5.8%. Increases in industrial supplies, including petroleum, as well as motor vehicles, engines, and parts, further boosted import figures.
Many of these imports contributed to growing retail inventories, a factor expected to soften the overall impact of trade on GDP.
Despite the surge in imports, exports of goods fell 2.0% to $174.2 billion, primarily due to a sharp 6.3% decline in consumer goods shipments. However, exports of food products increased by 4.8%.
Wholesale inventories saw a slight dip of 0.1%, while retail inventories increased by 0.8%, with motor vehicles and parts inventories showing the most notable rise at 2.1%.
Economists anticipate that the US economy grew at a solid annualized rate of 3.0% in the third quarter, matching second-quarter growth despite trade’s likely negative impact on GDP.
The government’s preliminary GDP estimate for Q3, due on Wednesday, is expected to confirm that trade acted as a drag on economic growth for the third consecutive quarter.