U.S. Trade Deficit Tightens as Imports Plunge

The U.S. trade deficit sharply decreased in October, driven by a significant drop in imports, which may boost economic growth in the fourth quarter. The deficit shrank 11.9% to $73.8 billion, with imports declining 4.0%. Concerns over potential tariffs from President-elect Donald Trump influenced import patterns.

In a significant movement for the U.S. economy, the trade deficit contracted noticeably in October. This was largely due to a marked decline in imports, which dipped by the steepest margin since late 2022, according to official data released on Thursday.

The trade deficit, a crucial economic indicator, narrowed by a substantial 11.9% to reach $73.8 billion, down from a revised $83.8 billion in September, as reported by the Commerce Department's Bureau of Economic Analysis. Economists had earlier predicted a reduction to $75.0 billion from the initially reported $84.4 billion.

This contraction in the trade gap was primarily driven by a 4.0% drop in imports, which saw goods imports plunging by 5.5%. The political maneuverings of President-elect Donald Trump, including potential tariffs on imports, have led businesses to reconsider their import strategies, potentially reversing this trend in the coming months.

(With inputs from agencies.)