The U.S. trade gap widened somewhat during August, the latest month for which we have figures available on this internationally configured data. Specifically, the deficit came in at $44.2 billion for the month, an increase from the upwardly revised July reading of $42.5 billion. (Initially, the July estimate had been a deficit of $42.0 billion.) Economists had been expecting a trade shortfall of $44.0 billion in August. So this was a slightly poorer performance than forecast, but not a major event.
The trade gap widened during that month, in part, because exports of agricultural and industrial goods fell. All told, exports declined by 1.0% in August, to $181.3 billion, as sales of industrial goods abroad dropped by $1.2 billion, to $39.0 billion. That was the lowest level in 18 months.
By comparison, imports were flat, slipping by 0.1% to $225.0 billion. Declines in the purchases of capital goods, autos, and consumer products offset higher oil prices. Imported crude oil quotations rose by an average of $0.53 a barrel in August, to $94.36 a barrel. Despite the drop in energy volumes, the cost of crude imports increased to $25.84 billion from $25.82 billion during July. This, too, was not a major deviation from expectations.
Overall, the trade deficit with China narrowed by 2.3% in August to a still-worrisome $28.69 billion, as exports to our second largest trading partner increased in August, while imports decreased, in a rare turn of events.
At the same time, the goods deficit with the European Union decreased from $12.0 billion in July to $11.7 billion in August. On the whole, this was an uneventful report that does little to change the overall economic outlook in our country, as we still anticipate an understated pace of GDP growth in the current half of some 1.5%, following a downwardly revised second-quarter growth rate of just 1.3%. A report issued at the same time this morning, in which the Labor Department noted that weekly jobless claims had dropped sharply from 369,000 to 339,000 in the most recent seven-day stretch was a much bigger event, and is more of a possible game changer.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.