Calendar › Advance goods trade and inventories › 2026-10-28

Goods Trade Deficit $134.9B vs $130B Est — Capital Goods Imports Up 77% on the Year

Fundamentals · 2026-10-28

Advance goods trade deficit $134.9B in September (vs $130B est), $2.8B wider than August's revised $132.1B and $52.2B wider than a year ago; imports $344.1B, +2.4% m/m, +28.2% y/y; exports $209.2B, +2.6% m/m, +12.7% y/y; capital goods imports $157.4B, +7.5% m/m and +77.2% y/y; industrial supplies imports −6.0%; consumer goods imports −12.0% y/y; wholesale inventories +0.6% (vs 0.5% est), August unrevised at +0.5%, +7.4% y/y; retail inventories +0.3%, ex autos +0.4% after +0.1%; wholesale history benchmarked on 26 October; next release 27 November.

What It Changes

• The deficit widened again and beat the consensus by $4.9 billion. Exports rose $5.3 billion, but imports rose $8.1 billion, and one category did more than all of that: capital goods imports were up $10.9 billion.
• Strip out capital goods and the deficit is narrower than a year ago. The capital goods gap alone was $84.1 billion in September, against $29.8 billion in September 2025. Everything else ran a $50.8 billion deficit, against $52.9 billion a year ago. The entire year-over-year widening is the AI hardware build-out arriving at the border.
• Trade is set to subtract from Q3 GDP tomorrow. July, August and September averaged a $128.6 billion goods deficit, against $101.1 billion in June. These are nominal figures, so the real drag depends on prices, but the direction is not in doubt.
• The inventory build offsets some of it. Wholesale inventories rose 0.6%, a touch above the 0.5% expected, and retail stocks outside autos picked up to 0.4%. That adds back to GDP, but it is a smaller number than the trade gap.

Impact

• USD — Slight bearish — a wider deficit and a larger trade drag on Q3 growth lean against the dollar, but with the FOMC at 14:00 the print is a footnote to the day's direction.
• The beat against consensus was $4.9 billion on a $135 billion number, small next to August's $17.6 billion miss.
• Imports are rising 28.2% on the year while exports rise 12.7%, and imports start from a base 65% larger; the gap in dollars keeps widening.
• US Indices (ES / NQ / YM / RTY) — Mixed — a larger trade drag lowers Q3 GDP tracking, but the import mix is investment demand, not weakness.
• NQ carries the read: $157.4 billion of capital goods imports in one month, 45.7% of all goods imports, is the demand side of the AI chip and server trade that has led NQ over YM for three sessions.
• RTY is closer to the consumer side: consumer goods imports are 12.0% below a year ago, while retailers outside autos are restocking at 0.4% a month.
• Gold (GC) — Neutral — nothing here moves real yields or the December hike pricing that gold is waiting on; the Fed at 14:00 does.

Inside The Number

The advance goods trade deficit widened $2.8 billion to $134.9 billion in September, against a $130 billion consensus (TradingEconomics). August was revised to $132.1 billion from the $132.6 billion first published. A year ago, in September 2025, the deficit was $82.7 billion. Imports rose $8.1 billion, or 2.4%, to $344.1 billion, and exports rose $5.3 billion, or 2.6%, to $209.2 billion.

Capital goods are the story for a third straight month, and the pace is accelerating. Capital goods imports rose 7.5% to $157.4 billion, 77.2% above a year ago. In the July report that comparison was 46.9%; in August it was 57.2%. Capital goods now make up 45.7% of all goods imports, up from 33.1% in September 2025. On their own, they added $10.9 billion to imports in September, more than the $8.1 billion rise in the total.

The hidden number is what the deficit looks like without them. Capital goods ran an $84.1 billion deficit in September. The other five categories together ran a $50.8 billion deficit, against $52.9 billion a year ago. So the year-over-year widening of $52.2 billion is all capital goods (a $54.3 billion wider gap) and the rest of the goods account has actually improved by $2.1 billion. Consumer goods imports are 12.0% below September 2025 at $59.3 billion, which fits a tariff regime that has now been in place since April 2025.

Industrial supplies went the other way. Imports in that category, which includes petroleum, fell $3.7 billion, or 6.0%, to $58.9 billion, after August's 17.1% jump. Exports of industrial supplies also fell, by 1.6%. This report does not separate price from volume, so how much of that is oil cannot be read from it.

Exports were broader than in August. Foods, feeds and beverages rose 12.8%, consumer goods 6.5% and capital goods 5.4% to $73.3 billion. Automotive exports fell 5.6% for a second month. Exports are 12.7% above a year ago, led by capital goods at +24.1%; the US is also shipping more equipment, just far less than it is buying.

Inventories rose a little faster than expected. Wholesale inventories rose 0.6% to $1,011.5 billion, against the 0.5% consensus, and August's 0.5% was unrevised. The mix flipped: nondurables rose 0.9% after 0.1%, and durables slowed to 0.4% after 0.8%. Wholesale inventories are 7.4% above a year ago, against 4.8% for retail, so the gap between the two layers has widened to 2.6 points, from 1.8 in the August report as first published. Retail inventories rose 0.3%; excluding autos they rose 0.4%, after 0.1% in August, while motor vehicle dealers slowed to 0.2% from 0.7%.

One caution on the levels. Census revised the wholesale series on 26 October, using the 2023 and 2024 Annual Integrated Economic Survey. August's level is now $1,005.6 billion, against $965.7 billion in our 30 September brief. The monthly changes are comparable; the dollar levels in earlier posts are not.

The Internals

The headline, seasonally adjusted, in millions of dollars:

Measure · September 2026 · August 2026 · July 2026 · September 2025

Goods balance · -134,904 · -132,069 · -118,856 · -82,730

Exports · 209,244 · 203,977 · 199,823 · 185,704

Imports · 344,148 · 336,046 · 318,679 · 268,435

Imports by principal end-use category, seasonally adjusted, in millions of dollars:

Category · September 2026 · August 2026 · Month over month · Year over year

Capital goods · 157,362 · 146,427 · 7.5% · 77.2%

Consumer goods · 59,284 · 57,492 · 3.1% · -12.0%

Industrial supplies · 58,935 · 62,665 · -6.0% · 19.2%

Automotive vehicles · 34,285 · 35,724 · -4.0% · 2.4%

Foods, feeds and beverages · 18,131 · 18,604 · -2.5% · 8.1%

Other goods · 16,151 · 15,135 · 6.7% · 29.2%

Exports by principal end-use category, seasonally adjusted, in millions of dollars:

Category · September 2026 · August 2026 · Month over month · Year over year

Industrial supplies · 76,536 · 77,771 · -1.6% · 14.5%

Capital goods · 73,267 · 69,506 · 5.4% · 24.1%

Consumer goods · 22,217 · 20,868 · 6.5% · -10.9%

Foods, feeds and beverages · 16,008 · 14,187 · 12.8% · 15.9%

Automotive vehicles · 11,909 · 12,612 · -5.6% · -7.0%

Other goods · 9,307 · 9,033 · 3.0% · 12.4%

Inventories, seasonally adjusted, in millions of dollars:

Measure · September 2026 · August 2026 · Month over month · August m/m · Year over year

Wholesale, total · 1,011,522 · 1,005,588 · 0.6% · 0.5% · 7.4%

Wholesale durable goods · 628,663 · 625,983 · 0.4% · 0.8% · 7.8%

Wholesale nondurable goods · 382,859 · 379,605 · 0.9% · 0.1% · 6.9%

Retail, total · 885,327 · 882,331 · 0.3% · 0.3% · 4.8%

Retail excluding motor vehicles · 608,005 · 605,621 · 0.4% · 0.1% · 4.5%

Motor vehicle and parts dealers · 277,322 · 276,710 · 0.2% · 0.7% · 5.6%

The monthly change in wholesale inventories carries a 90% confidence interval of ±0.2%, and retail ±0.2%; both changes are statistically significant. August's retail change was revised to 0.3% from a preliminary 0.2%. Survey response rates were 51.1% for wholesale and 48.0% for retail.

Where The Gap Came From

Change in imports from August to September, by category, in billions of dollars:

Category · Change · Share of the $8.1B rise

Capital goods · +10.9 · 135%

Consumer goods · +1.8 · 22%

Other goods · +1.0 · 13%

Foods, feeds and beverages · -0.5 · -6%

Automotive vehicles · -1.4 · -18%

Industrial supplies, including petroleum · -3.7 · -46%

The deficit with and without capital goods, seasonally adjusted, in billions of dollars:

Measure · September 2026 · September 2025 · Change

Total goods balance · -134.9 · -82.7 · -52.2

Capital goods balance · -84.1 · -29.8 · -54.3

Balance excluding capital goods · -50.8 · -52.9 · +2.1

Capital goods imports over the past four months:

Month · Capital goods imports · Year over year

June 2026 · $125.9B · n/a

July 2026 · $140.3B · 46.9% as first published

August 2026 · $146.4B · 57.2% as first published

September 2026 · $157.4B · 77.2%

Against This Morning's Open

• The Open carried the goods trade balance at -$130B against a -$132.1B prior, and wholesale inventories at 0.5% against 0.5%. The deficit came in $4.9 billion wider than that, and inventories 0.1pp firmer.
• The Open said the 08:30 slot "rarely moves anything on its own" and put the fulcrum on the FOMC at 14:00. Nothing in this print argues with that: it is a GDP-accounting input a day before the GDP number itself.

What This Sets Up

• Q3 advance GDP prints tomorrow, Thursday 29 October, at 08:30 ET, and this release is its last trade and inventory input; a $128.6 billion quarterly average goods deficit against June's $101.1 billion points to net exports subtracting.
• Next advance economic indicators report — Friday, 27 November 2026, 08:30 ET, with October data. A fourth straight rise in capital goods imports would confirm the AI build-out is still accelerating and still imported; a stall would be the first sign it is peaking.
• The ex-capital-goods balance is the line to watch. If it keeps improving while the total widens, the deficit is an investment story; if it starts widening too, consumers and tariffs are back in it.
• The wholesale-retail gap (7.4% against 4.8% y/y) is the inventory read to carry forward: a narrowing would say the stock built up one layer back from the shelf is clearing.

What Is This?

• What it is: The Census Bureau's Monthly Advance Economic Indicators Report (CB26-177), published about four weeks after the month ends. It gives the first read on the goods trade balance from U.S. Customs documents, plus advance wholesale and retail inventories from surveys of about 4,200 wholesale and 11,000 retail firms. The full trade report (FT-900), including services, follows later.
• Why it matters: Net exports and inventory change are two components of GDP, and this is the first hard read on both for September, the day before Q3's advance GDP estimate. In 2026, it is also the clearest monthly read on how much of the AI build-out is imported.
• How to read it: A wider deficit subtracts from GDP; an inventory build adds to it. The figures are in current dollars and not adjusted for prices, so higher oil prices raise both imports and the deficit without any change in volume. Read the end-use categories rather than the total. The goods data are a near-complete count and not subject to sampling error; the inventory data come from surveys and carry confidence intervals.

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_For informational purposes only. Not investment advice._