US goods trade deficit widens in September as AI boom drives imports to record high

A goods trade deficit means the value of a country’s imported goods exceeds the value of its exported goods. The US gap widened in September because imports climbed to a record while exports also increased, but by less. The result was a larger shortfall in goods trade.

Imports rose 2.4%, or $8.1 billion, to $344.1 billion. Capital goods imports led the increase, rising 7.5% in September and 77.2% from a year earlier. Consumer goods imports also rose 3.1%, reflecting continued consumer spending despite higher living costs. Exports increased 2.6%, or $5.3 billion, to $209.2 billion.

The widening deficit could weigh heavily on third-quarter GDP growth because imports are counted differently from domestic production. Economists estimated trade might subtract as much as four percentage points. Still, economists cited in the article viewed the import surge partly as evidence of strong business investment and consumer demand.

The US goods trade deficit rose 2.1%, or $2.8 billion, in September. It reached $134.9 billion, the highest level since March 2025. Economists surveyed by Reuters had expected a smaller deficit of $130.2 billion. The result showed that the trade gap widened more than anticipated.

Imports increased 2.4%, or $8.1 billion, reaching a record $344.1 billion. The increase was led by a 7.5% rise in capital goods. Consumer goods imports rose 3.1%, while imports of other goods increased 6.7%. Imports of industrial supplies, food, and motor vehicles declined.

Exports moved higher too, but not enough to offset imports. Goods exports rose $5.3 billion, or 2.6%, to $209.2 billion. Food exports jumped 12.8%, capital goods exports rose 5.4%, and consumer products advanced 6.5%. Motor vehicle and industrial supplies exports fell.

Capital goods were the clearest driver of September’s import increase. These are business equipment and hardware used for production and investment. Their rise matters because the article links it to the rapid expansion of AI infrastructure and technology companies’ spending.

Capital goods imports increased 7.5% in September and surged 77.2% from a year earlier. Stephen Stanley said much of the hardware needed by technology companies comes from overseas. That creates a direct mechanism: US companies invest in AI systems, but imported equipment enters the country to support that investment, widening the goods trade gap.

Other imports rose as well. Consumer goods imports increased 3.1%, partly reflecting sustained consumer spending despite rising living costs. Industrial supplies fell 6.0%, while food and motor vehicle imports also declined. The import data therefore point to a particularly strong role for business equipment connected with AI investment.

GDP measures economic activity produced within the country. In standard GDP accounting, imports are subtracted from spending totals because consumption, investment, or government purchases may include foreign-made goods. Without that subtraction, the same imported product would be counted as domestic output even though it was produced abroad.

For example, a US technology company can buy imported hardware for an AI project. The purchase may appear in business investment or inventories, but the imported portion is removed from GDP through the imports adjustment. If imports rise sharply while exports do not keep pace, net exports become more negative and reduce measured quarterly growth.

That accounting effect does not necessarily mean the economy is weakening. The article reports record imports alongside rising AI-related investment and resilient consumer spending. Economists estimated trade could subtract up to four percentage points from third-quarter growth, while describing the import surge as partly a sign of economic strength.

Economists estimated that trade could subtract as much as four percentage points from US GDP growth in the July-September quarter. Oxford Economics put the expected drag at 3.25 percentage points. Trade had not contributed to US GDP growth for three consecutive quarters, and the widening goods gap suggested another substantial negative effect.

The main mechanism was a sharp increase in imports. Goods imports reached a record $344.1 billion in September, rising faster than exports. Since imports are deducted in GDP accounting, the larger gap between imports and exports reduces the contribution from net exports, even when imported goods support business activity inside the country.

Other forces were expected to keep overall growth strong. The government’s advance GDP estimate was expected to show support from a surge in AI-related investment and resilient consumer spending. A Reuters survey had forecast annualized third-quarter growth of 3.2%, up from 2.2% in the second quarter.

Some imported goods may support economic activity later rather than immediately. The article reports that a portion of September’s imports may have ended up as unsold inventory at wholesalers and retailers. Those goods have entered the country but may not yet have reached final buyers.

Inventories can affect GDP because changes in stocks are included in economic activity. If businesses accumulate goods, the inventory increase can partly offset the negative effect of imports in the quarter. Later, retailers can sell those products, or businesses can use imported equipment and materials in production. The article does not identify exactly which imported goods remained unsold.

September data showed wholesale inventories rose 0.6% and retail inventories increased 0.3%. Stocks at motor vehicle and parts dealers rose 0.2%. Excluding motor vehicles and parts, retail inventories rose 0.4%, after increasing 0.1% in August. These figures suggest inventories could cushion the immediate GDP drag.

In standard GDP accounting, spending is grouped into consumption, business and residential investment, government spending, and exports. Imports are subtracted because GDP measures production within the country. Exports are added because they represent domestic production sold abroad. This framework explains why a country can show strong spending but weaker growth from trade.

For example, a US company buying imported AI hardware may record the purchase as business investment, or the equipment may enter inventories before use. The import value is then deducted so foreign production is not counted as US output. If a US-made product is exported, it is added because domestic production supported that sale.

The article’s September data illustrate the effect. Imports reached a record $344.1 billion, while exports rose to $209.2 billion. Trade therefore became a large drag on quarterly growth. At the same time, AI investment, consumer spending, and rising inventories could support measured activity through other GDP components.