What Is a Trade Deficit? How the U.S. Measures Trade in Goods and Services

How the U.S. counts what it sells and buys abroad, and where the official numbers come from

Por Glauber em 26 de October de 2026

What Is a Trade Deficit?

Exports, Imports and the Gap Between Them

The Bureau of Economic Analysis (BEA) describes trade as the monthly transactions in goods and services between U.S. residents and residents of other countries. Exports are U.S. sales abroad, and imports are U.S. purchases from abroad. The trade balance is simply the difference between the two. When imports exceed exports, the result is a trade deficit, and when exports exceed imports, the result is a surplus.

Here is a deliberately simple picture (illustrative example). Imagine an economy that sells $80 of goods and services to the rest of the world in a month and buys $100 from it. Its trade balance would be a deficit of $20. The numbers are made up to show the arithmetic, and they say nothing about any real month.

Goods and Services Are Counted Separately

The total balance combines two pieces that are published separately: goods and services. In the August 2026 release, goods showed a deficit of $136.6 billion, while services showed a surplus of $31.0 billion. Because the services surplus offsets part of the goods deficit, the goods deficit is larger than the total.

Who Measures U.S. Trade, and How

A Joint Effort by BEA and Census

The monthly report titled U.S. International Trade in Goods and Services is produced jointly by BEA and the Census Bureau. Census covers the goods data, and BEA’s balance of payments division covers services.

Where the Goods Data Comes From

According to Census, exports other than those to Canada come from mandatory electronic filings in the Automated Export System. For Canada, the United States uses Canadian import statistics under a 1987 memorandum of understanding. Imports come mainly from electronic submissions in the Automated Commercial Environment, supplemented by entry, warehouse withdrawal and foreign trade zone documents.

Census also defines its terms carefully. Merchandise exports are the physical movement of goods out of the United States to other countries, including goods leaving bonded warehouses and foreign trade zones. Merchandise imports are goods of foreign origin plus U.S. goods returned unchanged or after processing or assembly abroad.

Two Ways to Report Goods

Goods are reported on two bases. The Census basis is merchandise data as compiled by Census. The balance of payments basis is that same data after BEA adjusts it to match international and national accounts concepts, to account for changes of ownership that happen without a border crossing, to avoid double counting with services, and to standardize valuation. For example, military sales are removed from exports because BEA records them as services, and nonmonetary gold is added.

Reading a Real Report: August 2026

To see how this works in practice, consider the report covering August 2026, released on October 6, 2026. It showed the total goods and services deficit rising to $105.6 billion from $92.8 billion in July, after revision, because imports rose more than exports. The figures are seasonally adjusted.

The same figure appears in a public data series. The Federal Reserve Bank of St. Louis publishes the series BOPGSTB, called Trade Balance: Goods and Services, Balance of Payments Basis. It is monthly, reported in millions of dollars, seasonally adjusted, and sourced from Census and BEA. Its August 2026 observation is negative 105,572 million dollars, which matches the roughly $105.6 billion deficit in the report. These are August 2026 numbers only. Estimates are revised, which is why the report labels the prior month as revised, and the next release is listed for November 4, 2026.

Where Do You Stand on This?

Think about the last time you saw a trade number in the news. Did the headline make you worry, or did it feel like background noise? A useful exercise is to ask what you would need to know before deciding whether a given deficit mattered: which month it covers, whether goods or services drove the change, and whether the figure was later revised. Which of those three questions do you usually skip, and what would change if you asked it first?

Why the Number Matters, and Why It Is Not a Verdict

A Piece of the Bigger Economic Picture

BEA’s glossary defines the balance on goods and services as the difference between exports and imports of goods and services, and says that, broadly, this balance is conceptually equal to net exports, a component of GDP. If you want a refresher on how that broader measure works, our guide to what GDP measures and what it leaves out is a good companion read. Trade patterns are also part of a larger debate about how countries source what they buy, which we explored in our look at deglobalization and its economic effects.

Caution Before Calling It Good or Bad

It is tempting to treat a deficit as automatically good or bad, but the official sources used here do not make that judgment, and this article does not either. A bigger deficit in one month can reflect many things, and the August 2026 report itself simply says that imports rose more than exports. Nothing in this guide should be read as a forecast.

A Short Checklist for Reading Trade Headlines

Start by finding the month and the source, because the same number can be revised later. Next, check whether the figure covers goods only, services only, or the combined total. Finally, note whether the data is seasonally adjusted and which basis, Census or balance of payments, is being used. For the full methodology, the BEA page points to U.S. International Economic Accounts: Concepts and Methods.

If you are curious how slowdowns are officially identified, you can also read what a recession is and who decides when one starts.

Frequently Asked Questions

What is a trade deficit in simple terms?

It is what you get when a country’s imports of goods and services are larger than its exports. BEA defines the trade balance as the difference between the two, and a deficit occurs when imports exceed exports.

Who publishes the official U.S. trade figures?

BEA and the Census Bureau produce the monthly report together. Census covers goods data, and BEA covers services.

This content is for informational purposes only and does not constitute personalized financial advice. Terms and conditions change, so confirm the details with the official provider before making a decision.

Last reviewed: 2026-10-20

Sources consulted:

https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services
https://www.census.gov/foreign-trade/guide/sec2.html
https://fred.stlouisfed.org/series/BOPGSTB
https://bea.gov/index.php/help/glossary/balance-goods-and-services