We can say what we want about the tariffs, but the numbers are becoming much more clear. This morning’s trade data was a smashing upside surprise.
The trade deficit continues to narrow, and if the trend continues, we will reach numbers that have not been seen in nearly 25 years. The data speak for themselves. Last month’s surprising narrowing is definitely not a one-off thing.
I personally never thought the United States economy would ever be able to achieve these types of numbers ever again in my lifetime.
GDP estimates are going to continue being ratcheted upwards. Labor costs are fading and productivity numbers continue to rise. Say what we will about current economic policy, but the trend reversals are absolutely spectacular.
Trade Balance (Oct)
Act: -29.40B Cons: -58.10B Prev: -48.10B
Exports (Oct)
Act: 302.00B Prev: 289.30B
Imports (Oct)
Act: 331.40B Prev: 342.10B
Unit Labor Costs (QoQ) (Q3)
Act: -1.9% Cons: 0.0% Prev: -2.9%
Nonfarm Productivity (QoQ) (Q3)
Act: 4.9% Cons: 4.9% Prev: 4.1%
This incredible narrowing of the trade deficit will ironically hurt the value of the dollar in the international markets as the phenomena underpinning the concepts of the Triffin paradox continue to unwind.
As expected, the Atlanta Fed GDP estimate skyrocketed in the wake of this morning’s data.
US Economy Set To Boom In Q4 As Trump’s Tariffs Push Trade Deficit To 16-Year Lows
-Benzinga
The U.S. economy may be on track to post an exceptionally strong expansion in the fourth quarter of 2025, helped in large part by a sharp narrowing in the trade deficit following tariffs implemented under President Donald Trump.
The Atlanta Fed’s GDPNow model lifted its estimate of fourth-quarter real GDP growth to a blockbuster 5.4% annualized, on Jan. 8, up from a prior estimate of 2.7% earlier in the week. Outside the post-pandemic rebound, it would mark the strongest quarterly growth rate since 1984.
The upward growth revision was triggered by better-than-expected October trade figures, with net exports now adding nearly 2.0 percentage points to GDP growth after previously subtracting from the forecast, according to Atlanta Fed calculations.
Trade data released Thursday by the U.S. Census Bureau and Bureau of Economic Analysis showed the goods and services trade deficit shrank to $29.35 billion in October 2025, a roughly 39% monthly drop and the lowest since mid-2009.
The outcome was well below the $58.1 billion consensus forecast. Exports rose by 2.6% to $302.0 billion, while imports fell 3.2% to $331.4 billion.
Almost all of the improvement came from goods trade. The goods deficit shrank by $19.2 billion to $59.1 billion, while the traditionally resilient services surplus edged slightly lower to $29.8 billion, reflecting softer government services exports.
The composition of exports reveals why economists are cautious about extrapolating October’s strength. Goods exports climbed $7.1 billion to $195.9 billion, led overwhelmingly by industrial supplies and materials, which surged $10.2 billion, and non-monetary gold, which jumped $6.8 billion.
By contrast, consumer goods and pharmaceutical exports declined.
On the import side, the contraction was both large and concentrated. Goods imports fell by $12.1 billion to $255.0 billion, with particularly sharp declines in pharmaceutical preparations ($14.3 billion) and consumer goods ($14.0 billion).
These declines more than offset the rise in capital goods inflows, including computers and telecommunications equipment.
In inflation-adjusted terms, the move was even more striking. The real goods deficit shrank nearly 20% in October, as real imports fell faster than real exports.
The U.S. posted sharply larger surpluses with the United Kingdom and Switzerland, while deficits widened with Taiwan and Vietnam, reflecting shifts in supply chains and technology imports.
Notably, the deficit with Ireland fell by $15.1 billion in a single month due to a plunge in pharmaceutical imports.
Despite October’s dramatic improvement, year-to-date figures paint a more restrained picture. The overall goods and services deficit remains 7.7% higher than in 2024, as imports have risen faster than exports over the course of the year.
All eyes on Friday’s Supreme Court decision
The U.S. Supreme Court is scheduled to issue a decision Friday on the legality of tariffs imposed under emergency executive authority.
The ruling will determine whether the administration exceeded its statutory powers in levying broad import duties.
According to Polymarket, there is only a 23% chance the Court rules in favor of Trump’s tariffs.
Stone, check this article, politics is biology. Very interesting!
nxrstudios.substack.com/p/politics-is-biology
You bet your bippy it’s in the DNA. Only European Caucasians choose the form of government that suits them. It’s Godly, according to YHVH.
All other races are governed by other forces.
The United States is definitely gearing up its economy for a global conflict. No doubt.
As internal unrest grows inside the US, the Japheth confederacy, led by Russia and China, will make an agreement to strike the European Caucasian nations and the land of unwalled villages (US and Canada).
Are you noticing price increases on durables at all?
Like what kind? Personally, it’s a mixed bag. SFR stuff like appliances and materials have stabilized in price. Prices keep going up, but I can get some excellent prices with stuff on sale. Electronics are similar.
Cars and furniture are another story. Many things have gone up, because of tariffs. No doubt. With cars, the manufacturers keep adding stuff and features. It’s annoying. I was thinking about getting another Outback, but the 26 models are hitting up to $50k. That’s insane for a Subaru. I would like to get a new F-150, but the base 8 cylinder is 50k.
Overall, it’s a lot better than a few years ago, but still running hotter than last decade, for sure.
That’s interesting. Looking at this another way, we are doing much less business with China which is good for several reasons. Also, as you said this isn’t strong for the dollar because our currency isn’t flooding other markets. Now we are expanding debt by expanding all things A.I. including military spending. This just seems like a very crafty way to minimize the dollar to make way for the transition into the new digital system, while being very, America first.