Goods trade deficit widens as AI-related demand pushes imports to record high

WASHINGTON — The trade deficit in goods unexpectedly widened in September as imports surged to a record high, driven by strong demand ​for capital goods linked to the AI infrastructure buildout, suggesting trade was a significant drag on economic growth in the third quarter.

The continued deterioration reported by the Commerce Department on Wednesday led some economists to estimate that trade subtracted ‌as much as four percentage points from gross domestic product growth last quarter.

Still, the government's advance GDP estimate for the July-September quarter on Thursday is expected to show ⁠strong growth, thanks to the AI spending boom and robust ​consumer spending.

"Although trade will weigh on quarterly GDP, this is ⁠a sign of strength rather than weakness for the U.S. economy as it signifies continued business investment and momentum for consumer spending," ‌said Daniel Vielhaber, an economist at ‌Nationwide.

The goods trade shortfall increased 2.1%, or $2.8 billion, to $134.9 billion last month, the largest since March 2025, ⁠the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast the goods ⁠deficit at $130.2 billion. The goods trade gap widened through the third quarter.

Goods imports rose 2.4%, or $8.1 billion, to $344.1 billion last month. They were boosted by a 7.5% jump in capital goods. Imports of capital goods soared 77.2% year-on-year in September.

"So much of the hardware that the tech companies need is coming from overseas, driving a massive widening in the trade gap," said Stephen Stanley, chief economist at Santander Capital Markets.

Strong consumer spending

Aside from the AI investment frenzy, relentless strength ‌in consumer spending, despite the rising cost of living, is also sucking in imports.

Consumer goods ​imports increased 3.1% last month. Imports of other goods rose 6.7%. But imports of industrial supplies, which include gold and petroleum, fell 6.0%.

Gold is excluded in the calculation of GDP. There were also decreases in imports of food and motor vehicles.

Exports of goods climbed $5.3 billion, or 2.6%, to $209.2 billion, with food shipments soaring 12.8%. Exports of capital goods increased 5.4%, while those of consumer products advanced 6.5%. Exports of motor vehicles, however, declined as did those of industrial supplies.

Economists at Pantheon Macroeconomics estimated the trade drag at 4 percentage points, while those at Oxford Economics put the hit at 3.25 percentage points. ​Trade has not contributed to GDP growth for three straight quarters.

But some of the imports in September ended up as unsold inventory at wholesalers and retailers, ‌which could soften ‌the blow on GDP. The ⁠Census Bureau also reported that wholesale inventories increased 0.6% last month. Stocks at retailers rose 0.3%, with inventories at motor vehicle and parts dealers climbing 0.2%.

Excluding motor vehicles and parts, retail inventories increased 0.4% after edging up 0.1% in August. This component goes into the calculation of GDP. Prior to the trade and inventory data, a Reuters survey of economists forecast GDP increasing at a 3.2% annualized ‌rate last quarter. The economy grew ​at a 2.2% pace in the second quarter.

"Growth of around 1% now seems ‌more likely, although we concede that ⁠last quarter's headline GDP number ​is even harder to pin down than usual," said Oliver Allen, senior economist at Pantheon Macroeconomics.