WASHINGTON (Reuters) – The U.S. goods trade deficit fell in September as trade tensions restricted the flow of goods, but that will probably not change expectations of a further deceleration in economic growth in the third quarter.
The Commerce Department said on Monday the goods trade gap dropped 3.6% percent to $70.4 billion last month. Exports declined 1.6%, pulled down by plunges in shipments of foods and feeds, as well as automobiles. Goods imports tumbled 2.3% amid decreases in imports of industrial supplies, capital goods, motor vehicles and consumer goods.
The Commerce Department also reported retail inventories rose 0.3% in September after dropping 0.2% in the prior month. Retail inventories, excluding motor vehicles and parts, the component that goes into the calculation of gross domestic product gained 0.3% after slipping 0.2% in August.
But wholesale inventories dropped 0.3% last month after being unchanged in August.
Data this month showed a cooling in job growth in September and retail sales dropping for the first time in seven months. Manufacturing output also declined last month in part as a strike at General Motors depressed auto production.
The economy is losing momentum largely because of a 15-month trade war between the United States and China, which has sapped business confidence and undermined capital expenditure. The waning stimulus from last year’s $1.5 trillion tax cut package is also constraining growth.
According to a Reuters survey of economists, GDP likely increased at a 1.7% annualized rate in the third quarter. The economy grew at a 2.0% rate in the second quarter, slowing from the January-March quarter’s brisk 3.1% pace. The government will publish its snapshot of third-quarter GDP on Wednesday.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)