November 4, 2026
The trade deficit for August narrowed by $0.7 billion to $105.0 billion in September after having widened by $12.9 billion in August. The widening of the trade deficit in the third quarter subtracted 3.9% from GDP growth in that quarter. We expect it to widen further and subtract 1.6% from GDP growth in the fourth quarter.
Exports rose 1.9% in September to $321.5 billion after having risen 1.6% in August In the past year exports have risen 10.0%.
Oil exports have risen in recent months as the war with Iran has curtailed the supply of oil to European countries in particular. As a result, the oil surplus has climbed to $11.3 billion.
Imports rose 1.2% in September to $426.6 billion after having climbed 4.4% in August In the past year imports have risen by 21.3%. The increase in imports in the past year was concentrated in computers, computer accessories, telecommunications equipment, and semiconductors — all of which are being used for the AI buildout.
The trade deficit in real terms widened by $3.5 billion in September to to $119.5 billion after having widened by $9.8 billion in August..
Following GDP growth of 3.4% in the third quarter we expect GDP growth of 2.8% in the fourth quarter. That would give us 2.7% GDP growth for the year as a whole followed by the same 2.7% GDP growth in 2027.
Stephen Slifer
NumberNomics
Charleston, SC
Hi Steve,
I’m a bit confused, has the deficit increased so sharply as a result of overall reduced economic activity? Or is there some other factor at play here? Material costs? or? This seems surprising with the general weakness of the dollar.
Best,
Hi Chris what we are have seen in the recent trade data as well as what happened to trade in the first few months of the year were wildly distorted by the recession and subsequent rebound. The dramatic narrowing of the trade gap earlier did not mean a lot. Nor does the recent rebound. I guess the only point I was trying to make is that the increases in both exports and imports tells us nothing more than the rebound is underway with the recovery in the U.S. currently outpacing the rest of the world.
Ah, that makes sense.
Thanks