US Trade Deficit Falls to Lowest Level Since 2020
The US trade deficit narrowed sharply in September, dropping nearly 11% to $52.8 billion—the smallest gap since 2020. Commerce Department data surprised markets, coming in well below Bloomberg’s $63.1 billion forecast. Exports climbed 3% to near-record highs, driven by non-monetary Gold and pharmaceutical shipments, while imports edged up just 0.6%.
Capital Economics notes the pharmaceutical import surge may reflect preemptive buying amid tariff threats from former President Trump. Net exports are expected to provide a modest lift to Q3 GDP, though tariff-driven volatility continues distorting trade flows. The deficit’s contraction suggests rebalancing, but sustainability hinges on whether import demand cools as anticipated.