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The U.S. trade deficit fell in September after soaring close to a record high in the prior month.
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The numbers: The trade deficit fell 4.7% in September as exports of farm crops such as soy beans increased, but trade is likely to remain a sore spot for the U.S. economy as long as the coronavirus pandemic persists.
The trade gap slid to $63.9 billion from $67 billion in August, the U.S. Census Bureau said Wednesday, matching the forecast of economists polled by MarketWatch.
The trade gap exploded during the summer to a near record high, reflecting a rapid recovery in U.S. imports of autos, consumer electronics and other goods. Yet exports have lagged amid a slump in global demand.
What happened: U.S. exports advanced 2.6% in September to $176.4 billion. Soybean shipments to China accounted for much of the increase. American companies also exported more networking equipment and engines.
Imports rose a smaller 0.5% to $240.2 billion. The U.S. imported more autos, but imports of cell phones and other consumer goods fell sharply.
The trade gap is unlikely to fall much further in the next few months, with U.S. exports continuing to lag and renewed economic restrictions in Europe partly shutting off a key market.
Imports are also likely to rise as retailers restock for the holiday shopping season and a rebounding U.S. economy regains its appetite for foreign goods.
Big trade deficits subtract from gross domestic product, the official scorecard for the U.S. economy.
Big picture: Imports have returned to precrisis levels, but exports are still down sharply and it will take awhile until they fully recover.
The potential election of Democrat Joe Biden as president could lead to reduce trade tensions with China in 2021. The ongoing trade dispute had hurt farmers and manufacturers and was a drag on the economy even before the coronavirus crisis severely disrupted global trading patterns.
Market reaction: The Dow Jones Industrial Average DJIA, +2.06% and S&P 500 SPX, +1.78% were set to open higher in Wednesday trades. Biden and President Trump were still locked in a close election with results still being counted and Republicans appeared to be positioned to retain control of the Senate.
