WASHINGTON -- The U.S. trade deficit hit an all-time high of $80.9 billion in September as American exports fell sharply while imports, even with supply chain problems at American ports, continue to climb.
The September deficit topped the previous record of $73.2 billion set in June, the Commerce Department reported Thursday. The deficit is the gap between what the United States exports to the rest of the world and the imports it purchases from foreign nations.
In September, exports plunged 3% to $207.6 billion while imports rose 0.6% to $288.5 billion.
Part of the weakness reflected a 15.5% drop in petroleum exports related to the drilling rig and refinery shutdowns during Hurricane Ida in the Gulf of Mexico. Economists expect that decline to reverse in coming months with petroleum production coming back on line.
In September, the deficit in goods rose to $98.2 billion, up a sharp 10% from the August deficit. The surplus in services, which covers such things as airline travel and financial services, rose 10.5% to $17.2 billion, still well below the levels seen before the pandemic hit. The surplus in services is expected to rise further as COVID-19 cases retreat and travel restrictions are eased.
The rising trade deficit subtracted 1.1 percentage points from growth in the July-September quarter, a period when the economy, as measured by the gross domestic product, slowed to an annual growth rate of just 2%, sharply lower than a GDP growth rate of 6.7% in the April-June period.
As COVID-19 cases retreat and the supply chain becomes untangled, the U.S. trade deficit should start to improve in coming months although the improvement may be modest, economists say.
“We look for the trade balance to remain historically elevated through year-end, but moderation in domestic demand will cool import volumes while steady vaccine diffusion and slower virus spread should underpin stronger export growth," Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, said.