U.S. Trade Deficit Narrows to Roughly Three-Year Low in August

The U.S. trade deficit in goods and services (BOP basis) declined to $58.3 during August from $64.7 billion in July, revised from $65.0 billion, according to the U.S. Census Bureau. A $61.9 billion deficit was expected in the Action Economics Forecast Survey. Exports grew 1.6% (-2.1% y/y) in August following a 1.7% July gain, revised from 1.6%. Imports fell 0.7% (-4.4% y/y) after an unrevised 1.7% July increase.

The narrowing of the goods & services deficit in August reflected a decline in the goods trade deficit to $84.5 billion compared to an $89.9 billion deficit in July. Goods exports increased 1.8% (-6.4 y/y) after a 2.0% rise. Imports of goods fell 0.9% (-5.0% y/y) after increasing 2.1% in July. The services trade surplus increased to $26.2 billion in August, the highest level since March 2018, from $25.2 billion in July. Services exports rose 1.2% (7.8% y/y) following a 1.0% July rise. Services imports edged 0.1% higher (-1.6% y/y) after falling 0.2% in July.

The real (inflation-adjusted) goods trade deficit narrowed to $83.9 billion in August after increasing to $88.4 billion in July. Real exports of goods rose 0.1% (-2.9% y/y), following three straight monthly gains. Real exports of foods, feeds & beverages rose 2.0% (-13.5% y/y). Real capital goods exports gained 2.0% (1.7% y/y) while real nonauto consumer goods exports rose 4.8% (1.0% y/y). Working lower, real auto exports fell 8.4% (+14.1% y/y) and real industrial supplies & materials exports fell 1.2% (-9.8% y/y). Real imports of goods declined 1.9% (-1.8% y/y) after rising 1.9% in July. Real imports of nonauto consumer goods fell 3.1% (-7.5% y/y) and real capital goods imports weakened 2.4% (-2.7% y/y). Real auto imports were off 1.8% (+11.9% y/y) and real foods, feeds & beverage imports fell 1.2% (-9.4% y/y). Increasing 1.0% (-2.2% y/y) were real industrial supplies imports.

The rise in services exports reflected a 5.5% increase (28.5% y/y) in travel services and a 0.3% gain (9.0% y/y) in transport services. Financial services exports rose 1.3% (2.6% y/y). A 0.1% uptick (-1.6% y/y) in services imports reflected a 1.8% rise (19.9% y/y) in travel and a 1.0% gain (2.4% y/y) in imports of financial services.

The goods trade deficit with China narrowed to a seasonally adjusted $22.7 billion in August after increasing to $24.0 billion in July. Exports fell 1.5% (-16.4% y/y) after rising 3.5% and imports declined 4.1% (-26.0% y/y) after a 4.8% increase. The goods trade deficit with the European Union widened to $17.8 billion in August as exports fell 4.2% (+2.1% y/y) and imports declined 1.7% (+10.7% y/y). The goods trade deficit with Japan narrowed to $5.0 billion after falling to $5.9 billion in the previous month. Exports fell 0.3% (-11.9% y/y) and imports were off 7.2% (-1.1% y/y).

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.