The US trade gap widened eight per cent in September, to a greater-than-expected $41.78bn - its highest in four months. In August, it stood at $38.7bn. It was predicted to widen marginally to $38.9bn.
Exports declined, with nominal exports dropped by 0.2 per cent month-on-month, while imports increased by 1.2 per cent. Paul Ashworth, chief US economist at Capital Economics, says the widening suggests third-quarter GDP growth will need to be revised lower, to about 2.5 per cent, from the first estimate of 2.8 per cent.
The decline in exports would have been even worse if not for a 14.2% m/m surge in food & beverage exports. Otherwise, the decline was widespread, with consumer goods, capital goods and industrial supplies all in decline. It is possible that the Federal government shutdown played a role here, restricting export licenses and access to trade credit, but given the lack of any notable impact on other economic data releases, we're not convinced it played a big role.
The solid gain in imports was led by a 3.4% m/m jump in automotive imports, but the strength was fairly widespread across all categories.