U.S. trade deficit unexpectedly shrinks to smallest since 2020

(Bloomberg) — The U.S. trade deficit unexpectedly narrowed in September to the smallest since mid-2020 as exports surged.

The goods and services trade gap shrank nearly 11% from the prior month to US$52.8 billion, Commerce Department data showed Thursday. The median estimate in a Bloomberg survey of economists was for a US$63.1 billion deficit.

The value of U.S. exports rose 3% to the second-highest level on record, fueled by non-monetary gold and pharmaceutical preparations. Imports increased a more modest 0.6%. The figures aren’t adjusted for inflation.

Large monthly swings in trade this year related to U.S. implementation of tariffs have introduced similar volatility in the government’s measure of economic activity — gross domestic product. The September trade figures will help economists fine tune their estimates for third-quarter GDP.

That task has been more challenging as the government excludes trade in gold, unless used for industrial purposes such as the production of jewelry, from its GDP calculations.

What Bloomberg Economics Says…

“With all three months of data in hand, net exports likely contributed a modest boost to third-quarter GDP as firms continue to hold back shipments.”

— Estelle Ou and Nicole Gorton-Caratelli

Prior to the monthly report, the Federal Reserve Bank of Atlanta’s GDPNow forecast saw net exports contributing 0.86 percentage point to third-quarter growth.

The pickup in imports of pharmaceuticals “was presumably sparked by President Trump’s threat to impose tariffs on branded drug imports, although that threat issued on social media still hasn’t been implemented,” Paul Ashworth, chief North America economist at Capital Economics, said in a note. “The upshot is that those imports should eventually drop back to more normal levels.”

On an inflation-adjusted basis, the merchandise trade deficit narrowed to US$79 billion in September, the smallest in nearly five years. Exports of consumer goods, after adjusting for price changes, were the largest on record.

Consumer goods

The data also showed a sizable pickup in inbound shipments of pharmaceuticals. Imports of capital equipment and autos fell, as did imports of most consumer goods, including cell phones, appliances, toys and furniture.

Meanwhile, a record value of non-monetary gold was exported in September, largely reversing a recent surge in inbound shipments tied to tariff concerns. A month earlier, gold imports slumped after a massive increase in tariffs on Switzerland, a large exporter of the precious metal. 

The September report showed the U.S. exported a record value of goods to Switzerland, leading to the largest-ever trade surplus with the European nation, according to the Commerce Department. 

Meanwhile, the merchandise-trade shortfall with China, when adjusted for seasonal fluctuations, narrowed to the second-smallest in data back to 2009. The deficit with Mexico widened to a record, and the shortfall with Canada also grew.

©2025 Bloomberg L.P.

Visited 131 times, 3 visit(s) today

bloomberg Commerce Department economic indicators Paul Ashworth u.s. trade US news

Last modified: December 11, 2025