U.S. International Trade Deficit Narrows in August
by:Tom Moeller
|in:Economy in Brief
Summary
- Trade deficit stands at five-month low due to shrinking goods deficit.
- Services surplus is little changed.
- Exports increase, but imports decline.
The U.S. trade deficit in goods and services (BOP basis) narrowed in August to $70.4 billion from $78.9 billion in July, revised from $78.8, and $73.0 billion in June. The Action Economics Forecast Survey expected a deficit of $70.6 billion in August. Exports rose 2.0% (5.1% y/y) in August following a 0.5% increase in July. Imports declined 0.9% (+7.6% y/y) following a 2.1% rise in July.
The goods deficit narrowed to $94.9 billion in August from $103.2 billion in July. This was the smallest goods deficit since March. Total goods exports increased 2.5% (4.0% y/y) after a 0.4% gain in July. Exports of capital goods surged 3.1% (13.0% y/y). Auto exports strengthened 6.2% (-7.2% y/y) and exports of nonfood consumer goods excluding autos increased 4.7% (2.8% y/). Exports of “other” goods rose 7.4% (18.0% y/y). Exports of foods, feeds and beverages eased 0.8% (+4.6% y/y).
Total goods imports declined 1.4% (+7.2% y/y) in August following a 2.5% gain in July. The decline reflected a 6.8% drop (-2.1% y/y) in imports of industrial supplies and a 3.3% decline in auto imports. Capital goods imports were little changed (+18.0% y/y). Nonauto consumer goods imports rose 0.5% (7.5% y/y) while “other” imports rose 5.9% (7.9% y/y). Imports of foods, feeds & beverages rose 2.5% (7.2% y/y).
The services foreign trade surplus was fairly steady at $24.4 billion in August, down from a March high of $25.0. Services exports increased 0.9% (7.4% y/y) after rising 0.6% in July. Exports of maintenance and repair services rose 6.3% (57.4% y/y) while exported construction services increased 2.1%, also 57.4% y/y. Travel exports rose 2.8% (12.1% y/y). Exported financial services gained 0.8% (5.3% y/y) but transport services exports fell 1.7% (+8.2% y/y).
Imports of services increased 1.1% (9.6% y/y) in August as they did in July. The rise was led by an 8.0% jump (37.1% y/y) in charges for use of intellectual property after they strengthened 10.9% in July. Insurance imports rose 1.5% (11.6% y/y), transport imports fell 2.0% (+11.4% y/y) and construction services imports gained 1.4% (69.0% y/y). Travel imports increased 3.1% (13.2% y/y).
The real (inflation-adjusted) goods trade deficit (customs value) narrowed to $88.6 billion in August from $97.3 billion in July. This was the smallest deficit in six months. The $93.0 billion average in Q3 was steady with the Q2 average. Net exports subtracted 0.9% from Q2 real GDP growth and 0.6% from Q1 growth.
The U.S. goods trade deficit with China narrowed to $24.7 billion in August from $27.2 billion in July with exports to China rising 9.7% (11.6% y/y) while imports fell 3.8% (+9.7% y/y). The goods trade deficit with the European Union widened to $19.1 billion in August from $18.4 billion in July while the deficit with Japan narrowed to $4.9 billion from $5.4 billion in July.
The international trade data, including relevant data on oil prices, can be found in Haver’s USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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