The Commerce Department reported the trade gap fell to $40.8 billion in September, the lowest level in seven months, from a slightly downwardly revised $48.0 billion in August. Adjusting for prices, real goods exports were up 3.0% m/m (previous: -1.6%) and real goods imports declined 1.2% (previous: +2.9).
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Imports from China hit a record high in September, leaving the politically sensitive US-China trade deficit at an all-time high of US$36.3bil (RM154.8bil).
On a year-to-date basis, moreover, the manufacturing trade deficit this year is running 14.77 percent ahead of 2014’s total of $734.44 billion, which itself set a new record.
Exports of energy products increased 3.7 per cent to $7 billion in September with sales of crude and crude bitumen up 2.7 per cent to $4.6 billion.
Imports fell 1.8 percent to $228.7 billion, exclusively due to a drop in imports of goods such as industrial supplies, capital goods and automotive vehicles and parts.
Economists estimate that the deficit shrank to $41 billion from $48.33 billion prior, according to Bloomberg.
Read the Census/BEA release.
“It appears that we may be seeing the positive impact from the weaker Canadian dollar and firming USA domestic demand”, Reitzes said. Consumer goods led the way up, while a rebound in prices saw exports of energy products increase. Imports of industrial supplies-which includes oil-fell to the lowest level since August 2009.
The gap with Canada, the largest United States trade partner, widened by about 11 percent to $2.0 billion.
Economists have been waiting for a lower dollar to have the desired effect of boosting exports and that may finally be happening.
Exports, which were a key driver of growth for the USA economy coming out of the recession, are expected to stagnate or decline in coming months, weighing on overall economic growth.
Net profit in the year jumped 13.4% to $77.6 million compared to $68.4 million and diluted earnings per share rose to 15.4 cents from 13.6 cents in the same period a year ago. That was up 3.8 percent from August.
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What’s lessened the damage from falling exports are lower imports, mostly because of cheaper oil and rising US oil production.
