US goods trade deficit widens in September as AI boom drives imports to record levels | Today’s news
The US goods trade deficit widened more than expected in September. The reason is a record increase in imports. According to Reuters, the increase is being driven by demand for capital goods linked to a boom in artificial intelligence (AI) infrastructure, suggesting that trade may have weighed heavily on economic growth in the third quarter.
The latest worsening of the trade balance was reported on Wednesday by the Ministry of Trade, according to the press agency. It reportedly prompted some economists to estimate that the trade could have reduced gross domestic product (GDP) growth by as much as four percentage points in the July-September quarter.
However, the government’s preliminary estimate of third-quarter GDP, due on Thursday, is still expected to show strong growth, supported by a surge in AI investment and resilient consumer spending.
“Although trade will have an impact on quarterly GDP, this is more of a sign of strength than weakness for the US economy as it implies continued business investment and momentum in consumer spending,” said Daniel Vielhaber, an economist at Nationwide, quoted by Reuters.
trade in goods in the US
The goods trade deficit widened 2.1%, or $2.8 billion, to $134.9 billion in September. It’s the highest level since March 2025, the Commerce Department’s Census Bureau said. Economists polled by Reuters had predicted the deficit would reach $130.2 billion.
The shortfall in trade in goods continued to deepen in the third quarter.
Merchandise imports rose 2.4%, or $8.1 billion, to a record $344.1 billion in September, led by a 7.5% increase in capital goods. Imports of capital goods increased by 77.2% compared to the previous year.
“So much of the hardware that tech companies need comes from overseas, which leads to a massive widening of the trade gap,” Stephen Stanley, chief U.S. economist at Santander US Capital Markets, told Reuters.
Import vs export
In addition to the investment boom in artificial intelligence, sustained consumer spending despite the rising cost of living is said to be contributing to the increase in imports.
Imports of consumer goods rose 3.1% in September, while imports of other goods rose 6.7%. Imports of industrial supplies, which include gold and oil, fell 6.0%.
For the unaware, gold is excluded from the GDP calculation.
Imports of food and motor vehicles also fell during the month.
On the export side, merchandise shipments rose $5.3 billion, or 2.6%, to $209.2 billion in September.
Food exports jumped 12.8%, while exports of capital goods rose 5.4% and consumer goods rose 6.5%. Exports of motor vehicles and industrial supplies also fell, Reuters reported.
Trade weighs on GDP growth
Economists estimated that trade could deduct four percentage points from GDP growth in the third quarter, while economists at Oxford Economics estimate a drag of 3.25 percentage points.
Trade has not contributed to US GDP growth for three consecutive quarters, the report added.
However, some of September’s imports are believed to have ended up as unsold inventory at wholesalers and retailers, which could potentially help cushion the impact on GDP.
The Census Bureau reported that wholesale inventories rose 0.6% in September. Retail inventories reportedly rose 0.3%. Inventories at motor vehicle and parts dealers rose 0.2%.
Excluding motor vehicles and parts, retail inventories rose 0.4% in September after a slight increase of 0.1% in August.
Earlier, a Reuters poll of economists had forecast the U.S. economy growing at an annualized rate of 3.2% in the third quarter, compared with 2.2% in the second quarter.
