Developing story. Check back for updates.
The numbers: The U.S. trade deficit climbed almost 5% in September to $61.5 billion, but it remained near a three-year low and was on track to post the smallest increase since 2020.
Smaller deficits add to gross domestic product, the official scorecard for the U.S. economy. GDP grew at a rapid 4.9% pace in the third quarter.
Big picture: The deficit is on track in 2023 to be the lowest in three years, but the U.S. is still running historically high trade gaps.
A big part of the reason has been the strong U.S. economic recovery since the pandemic. Americans can afford to buy more foreign imports such as iPhones, clothes and spirits.
Yet if the economy slows and Americans can’t afford to buy as many imports, a falling trade deficit would actually be a sign of deteriorating U.S. conditions.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Tuesday trades.
Read the full article here
