US September trade deficit narrows sharply, but only due to falling imports
America's shortfall in trade with the rest of the world shrank unexpectedly last month and was at its narrowest since June 2018, but only because of a large drop in purchases from overseas.
According to the Department of Commerce, the US trade deficit in goods fell at a 3.6% month-on-month pace from $73.1 for August to -$70.4bn in September.
The median forecast form economists was for a print of -$73.5bn.
Exports declined by 1.6% against August to reach $135.9bn, while imports dropped by 2.3% to $206.3bn.
Ian Shepherdson at Pantheon Macroeconomics attributed the decline to in imports to the imposition of tariffs on many imports from China starting from 1 September.
But the 5.0% fall in purchases of Chinese goods would mean-revert in October, but not the drop in exports "if the collapse in the ISM export index is any guide".
Sheperdson also noted how September's decline in exports marked the second consecutive quarterly fall.
In the same report, Commerce said that wholesale inventories dropped at a 0.3% month-on-month pace in September (Barclays: 0.1%).
Combined, the two new data points meant that the quarterly rate of GDP growth might need to be revised up only "slightly" with GDP growth having likely expanded at a quarterly pace of 1.5% over the three months ending in September.