The numbers: The advanced trade deficit in goods narrowed to $70.4 billion in September, down 3.6%, according to the Commerce Department’s advanced estimate released Monday. This is the smallest goods deficit since June 2018. That was much smaller than the $73.7 billion estimate of economists polled by MarketWatch. The report is used by the government to better measure GDP.
The report also showed a 0.3% decline in wholesale inventories. And advanced retail inventories rose 0.3%. Non-auto retail inventories, a key input for GDP, rose 0.3%.
What happened: Both imports and exports fell in August, but imports fell at a faster pace.
The declines were widespread. Imports of consumer goods fell by 5% and capital good imports were down by 2.3%.
Food products accounted for the bulk of the decline in exports.
Big picture: The trade war is slowing down global trade. Total exports are now down almost 4% over the past year, while imports are down 3%.
What are they saying: “We continue to expect net trade to be a drag on growth in the third quarter,” said Katherine Judge, economist at CIBC World Markets.
Market reaction: Stock-index futures point to slightly higher opening as the S&P 500 index
neared record territory.