The trade deficit rose during the late summer. Here are five things we learned from U.S. economic data released during the week ending October 9.
The trade deficit swelled under pressure from rising imports. August’s 4.3 percent rise in imports to a seasonally adjusted $420.8 billion outpaced the 1.4 percent bump in exports to $315.2 billion. The resulting -$105.6 trade deficit represented a 13.7 percent surge in the Census Bureau/Bureau of Economic Analysis measure. The year-to-date trade deficit stood at -$557.0 billion, down 19.9 percent from the comparable period in 2025. The goods deficit expanded by $12.8 billion to -$136.6 billion during the month, while the services surplus grew by less than $0.1 billion to +$31.0 billion. The former resulted from increased imports of crude oil, nonmonetary gold, semiconductors, and industrial equipment (exports of those same items also increased). The U.S. recorded its largest goods trade deficits with Mexico, Vietnam, Taiwan, China, and the European Union. Conversely, the U.S. ran surpluses with the Netherlands, the United Kingdom, Hong Kong, and Brazil.
The service sector expanded in September. Although the Services PMI declined by a half point, the Institute for Supply Management measure remained above the 50.0 expansion/contraction threshold for the 27th straight month. Measures of employment (50.1) and inventories (57.8) improved, while business activity/production (56.5) and new orders (59.8) declined. Thirteen service sector industries reported growth in September, led by wholesale trade and real estate. Four others reported a slowdown, led by agriculture and mining. The press release noted that the top comments from survey respondents centered on “tariffs and fuel cost impacts.”
Another drop in consumer sentiment in early October. The University of Michigan’s Index of Consumer Sentiment fell 1.8 points to a seasonally adjusted 46.3 (1966Q1=100). The index was 13.6 percent below its year-ago level. The current conditions index fell 6.2 points to 44.6 (-23.7 percent versus October 2025), while the expectations index rose a full point to 47.3 (-6.0 percent versus October 2025). The indices were more likely to decline among “groups that have fewer resources to weather increases in prices” (e.g., lower income, small stock portfolios). Consumers expect prices to rise 4.7 percent over the next year, with long-term inflation at 3.5 percent.
The amount of debt consumers held on their credit cards declined slightly in August. Outstanding consumer credit balances (non-mortgages) increased by $6.3 billion to $5.197 trillion, leaving the Federal Reserve measure up 2.7 percent from a year earlier. Revolving credit balances, including those on credit cards, fell by $4.8 billion to $1.352 trillion. Nonrevolving credit balances, which include auto and college student loans, increased by $13.1 billion to $3.844 trillion. The former was up 3.4 percent from a year earlier, while the latter had a positive 12-month comparable of +2.5 percent. Wholesale inventories grew 0.5 percent to $964.2 billion.
Wholesalers reported higher sales and larger inventories in August. The Census Bureau estimates that merchant wholesalers’ sales totaled a seasonally adjusted $817.5 billion, up 1.8 percent for the month and 15.6 percent from a year earlier. Wholesale durable goods sales rose 2.5 percent, while nondurables gained 1.0 percent. The 12-month comparables were +20.3 percent and +11.1 percent, respectively. Wholesale inventories expanded 0.5 percent to $964.2 billion (+6.4 percent versus August 2025). Durable goods inventories swelled 0.8 percent, while nondurable inventories were unchanged. The resulting inventories-to-sales (I/S) ratio of 1.18 was down a basis point from July and 10 basis points from a year earlier. I/S ratios declined for both durable (1.45, down three basis points) and nondurable (0.90, down a basis point) goods.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending October 3, 2026, First-Time Claims, seasonally adjusted): 197,000 (-2,000 vs. the previous week, -36,000 vs. the same week a year earlier). 4-week moving average: 198,000 (-13.0% vs. the same week a year earlier).
- FOMC Minutes
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