The US trade deficit now sits at its lowest level since 2009 due to a sharp pullback in imports, notably pharmaceuticals. According to Commerce Department data showed Thursday, the goods and services trade gap shrank 39% from the prior month to $29.4 billion. The data came as a surprise, as all estimates in a Bloomberg survey of economists projected higher levels.

The Commerce Department data revealed that imports decreased 3.2%, reflecting declines in inbound shipments of medication and nonmonetary gold. Imports of pharmaceutical preparations dropped to their lowest since July 2022. The value of all US goods and services exports rose 2.6% in October; however, the US trade deficit figures aren’t adjusted for inflation.

Over the past year, there have been large monthly swings in trade. The biggest contributor to this has been US tariffs, which have given mixed results since last April. On one end, there’s been a surge in trade of nonmonetary gold and pharmaceutical preparations in recent months in response to Trump’s vacillating tariff announcements. On the other though, there have been questions surrounding the exact money being saved by the US through the tariffs and where that money is going. The US debt still sits north of $35 trillion, and inflation hasn’t shown too many signs of cooling.

Also Read: 500% Tariffs on BRICS Countries? US To Get Tough

On a positive note, separate government figures from today showed labor productivity accelerated in the third quarter to the fastest pace in two years, which stands to improve even more as companies invest more in artificial intelligence. Bloomberg analysts noted, “Volatile components added noise to the October report, especially the headline trade balance. Excluding the noise, the report shows trade likely boosted US economic growth to start 4Q, despite the government shutdown.”