A report released by the Commerce Department on Tuesday showed the U.S. trade deficit narrowed in the month of September, as the value of imports slumped by more than the value of exports.
The Commerce Department said the trade deficit narrowed to $52.5 billion in September from a revised $55.0 billion in August. The narrower deficit matched economist estimates.
The deficit shrank as the value of imports tumbled by 1.7 percent to $258.4 billion in September after climbing by 0.5 percent to $262.9 billion in August.
The report showed a steep drop in imports of consumer goods, including cell phones and other household goods, as well as notable decreases in imports of capital goods and automotive vehicles, parts, and engines.
Meanwhile, the Commerce Department said the value of exports slid by 0.9 percent to $206.0 billion in September after inching by 0.2 percent to $207.8 billion in August.
Exports of soybeans showed a significant decline along with exports of automotive vehicles, parts, and engines, while exports of civilian aircraft and engines saw notable growth.
The report also said the goods deficit narrowed to $71.7 billion in September from $74.4 billion in August, while the services surplus edged down to $19.3 billion from $19.4 billion.
Andrew Hunter, Senior U.S. Economist at Capital Economics, said the data confirms net trade was broadly neutral for third quarter GDP growth but said he expect trade to become a renewed drag in the fourth quarter.
"The possibility of a trade deal with China could provide a boost to exports, particularly if the Chinese step up purchases of agricultural products," Hunter said.
He added, "That all said, we remain skeptical that a lasting deal will be reached and, in any case, the continued weakness of the global surveys suggests that further weakness in exports lies ahead."