Widening Trade Deficit Challenges U.S. Economic Growth

The U.S. trade deficit expanded significantly in September due to increasing imports and declining exports, impacting economic growth negatively in the third quarter. This marks the third consecutive quarter of trade dragging down GDP. Despite this, the economy likely continued to grow at a 3.0% annualized rate.

The U.S. trade deficit in goods widened considerably in September as imports surged, indicating that trade remained a negative factor for economic growth in the third quarter.

The Commerce Department's Census Bureau reported on Tuesday that the goods trade gap grew by 14.9% to $108.2 billion last month due to a decline in exports. This data suggests that trade has reduced the gross domestic product for the third consecutive quarter. The government is set to release its preliminary GDP estimate for the third quarter on Wednesday.

According to a survey conducted by Reuters among economists, the economy likely expanded at a robust 3.0% annualized rate last quarter, consistent with the growth pace of the second quarter.

(With inputs from agencies.)