After eliminating the effects of price fluctuations, which generates the numbers used to calculate GDP, the trade deficit narrowed to $57.2 billion in September from $63 billion the previous month.
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The Bureau of Economic Analysis and the Census Bureau said that the US trade deficit narrowed, down from $48.02 billion in August to $40.81 billion in September.
The September deficit was much smaller than the consensus estimate of $43 billion.
Exports of goods increased $2.9 billion to $127.3 billion, driven by increases in consumer and capital goods. The petroleum deficit fell $1.3 billion to $5.6 billion. The drop in the trade deficit reversed the widening seen in August, though the prior month’s figure was revised slightly down to $48 billion from the previously reported $48.3 billion.
Dina Ignjatovic, economist at TD Economics, said this latest data shows that net trade will provide a substantial contribution to Canadian economic growth in 2015’s third quarter, which is set to be around 2.5% on an annualized basis-in line with the Bank of Canada’s forecast. Imports of services increased $0.1 billion to $41.1 billion, nearly entirely due to travel.
Exports rose three per cent, thanks to a 7.9 per cent surge in iron ore exports by value, and imports rose two per cent. “In contrast, imports fell by 3.1 per cent in the quarter”, he said in a note to clients.
The dollar has gained 16.8 percent against the currencies of the United States’ main trading partners since June 2014, undercutting export growth.
The strong dollar has especially hurt global-oriented companies such as oil producers, chemical makers and manufacturers of heavy machinery that sell lots of goods outside the U.S. Exports of US industrial supplies fell in September to the lowest level in five years.
The 4.6% increase in consumer goods exports was primarily related to increased worldwide sales of pharmaceutical and medicinal products.
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A separate report from the Institute for Supply Management this week showed the USA manufacturing sector grew at the slowest pace in more than two years in October. Petroleum imports were the lowest since May 2004, reflecting increased domestic energy production and lower oil prices. That was up 3.8 percent from August.
