Analysts at Nomura point out that the US goods trade deficit widened slightly to $76.0bn in September, above market expectations but below Nomura’s forecast (Nomura: $79.4bn, Consensus: $75.1bn).
“Goods exports were stronger than our expectation, which rebounded 1.8% m-o-m after three consecutive declines. Goods imports rose solidly by 1.5% m-o-m. The rebound in exports was led by industrial supplies (+5.9%), capital goods (+2.2%) and autos (+1.0%) while exports of foods, feeds and beverages continued to decline.”
“Goods imports of capital and consumer goods both increased strongly while foods, feeds and beverages, industrial supplies and auto imports all declined. The diverging external and domestic growth and changes in exchange rates should contribute to a widening deficit over the near term. Note that the recent appreciation of the US dollar should help partly reduce the impact from higher tariffs on import prices while stronger US dollar and retaliatory tariffs should negatively affect the competiveness of US manufactured goods abroad.”