International Trade: Continued Widening

Bottom Line:   Imports continued to rise modestly in September as exports fell, pushing the trade balance moderately wider to end the 3rd Quarter. The US exported nearly $6B fewer industrial supplies and materials, mostly non-monetary gold, in September. Service exports rose due to a slight increase in travel. Imports of capital goods, mostly computers, and industrial supplies, mostly chemicals, more than offset a sharp decline in auto imports amid slow production globally. On a trend basis, the trade balance has been moving steadily wider since 2018, a steady drag on GDP growth. Trade had a moderate negative contribution to the advance 2021 Q3 GDP growth estimate; the Q3 average for real trade balance for goods suggests this will be revised to be slightly less negative.The International Trade Deficit WIDENED by $8.1 billion to $80.9 billion in September, compared with market expectations for a decline to a $80.2 billion deficit.
 
Exports FELL by 3.0% to $207.6 billion after an increase of 0.6% in the prior month. The declines in industrial supplies and materials and capital goods were partially offset by increases in consumer goods.  Export growth is now 16.6% ABOVE their year-ago level.
 
Imports ROSE 0.584% to $288.5 billion after an increase of 1.3% in the prior month. The declines in motor vehicles and parts and consumer goods were more offset by increases in capital goods and industrial supplies and materials.   Imports are now 19.9% ABOVE their year-ago level.