US trade deficit shrinks in September

The US trade deficit shrank more than expected in September.

The Department of Commerce said in its trade balance report that the deficit was $US40.81 billion. Economists had estimated that the deficit — or exports less imports — shrank to $US41 billion from $US48.02 billion prior (revised from $US48.33 billion).

Imports fell by $US4.2 billion to $US228.7 billion, while exports rose $US3 billion to $US187.9 billion.

Exports have been dampened in recent months by the strong dollar, which weighed on demand for more-expensive American goods. That, and port-related issues, caused the trade deficit to grow steadily and balloon to a three-year record back in March.

“The big narrowing in the trade deficit in September is encouraging, but the bigger story is that the improvement won’t last,” wrote Steve Murphy at Capital Economics in a client note. “Over the next 12 months, the deficit is likely to widen and net trade will be modest drag on GDP growth thanks principally to the sharp rise in the dollar over the past year.”

NOW WATCH: The Most Important Thing I Learned About Business From Hugh Hefner

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.