Record US Q3 growth assured

washington — The United States’ trade deficit in goods narrowed sharply in September and inventories at retailers surged, sealing expectations for record economic growth in the third quarter after the worst performance in at least 73 years.

The data from the Commerce Department on Wednesday added to reports ranging from retail sales, durable goods orders and housing that suggested the economy has regained some footing, though gross domestic product would still likely remain below the department’s forecast for the fourth quarter.

The anticipated surge in GDP was driven by a more than $3 trillion government rescue package early this year, which provided a lifeline for many businesses and the unem

79.4B $

Goods trade deficit in September, down 4.5%

ployed as the Covid-19 pandemic disrupted the economy. The fiscal stimulus has since been exhausted, leaving the outlook for the fourth quarter murky amid a resurgence in new coronavirus cases.

The government is scheduled to publish its advance GDP growth estimate for the third quarter today, five days ahead of the US presidential election next Tuesday.

“We should remember output will be below that of the end of fourth quarter of 2019,” said James Knightley, chief international economist at ING. “There is a long way to go before the economy is fully healed and unfortunately the challenges are mounting.”

The goods trade deficit decreased 4.5 per cent to $79.4 billion last month. Exports of goods increased 2.7 per cent to $122 billion, led by a surge in shipments of foods, feeds and beverages. There were also increases in exports of motor vehicles, consumer and capital goods. Exports of industrial supplies fell. Imports fell 0.2 per cent to $201.4 billion last month, pulled down imports of industrial supplies, consumer goods and other goods.

September’s decrease in the goods trade deficit after two straight monthly increases suggested trade would be a smaller drag on GDP growth than had been anticipated earlier. —