The United States trade deficit unexpectedly narrowed in September, reaching its lowest level in more than five years. The improvement was driven by a surge in exports and only modest growth in imports, signalling that trade likely contributed positively to the country’s economic performance in the third quarter, according to Reuters.

The trade gap contracted by 10.9 per cent to $52.8 bn, the lowest since June 2020. Exports rose three per cent to $289.3 bn, with goods exports climbing 4.9 per cent to $187.6 bn, led by record-high shipments of consumer goods. Imports increased by just 0.6 per cent to $342.1 bn, with goods imports rising 0.6 per cent to $266.6 bn. Imports of automotive vehicles, parts, and engines recorded their lowest level since November 2022.

The goods trade deficit also narrowed by 8.2 per cent to $79.0 bn, marking its lowest level since September 2020. Economists had predicted the deficit would widen to $63.3 bn, making the actual outcome a notable surprise.

The data, released by the Commerce Department’s Bureau of Economic Analysis and Census Bureau, comes ahead of the first estimate of third-quarter US gross domestic product, which was delayed due to the country’s 43-day government shutdown. Analysts say the trade improvement may support the reported 3.5 per cent annualised growth for the third quarter estimated by the Atlanta Federal Reserve.

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