Improving global demand and a weaker dollar are helping boost U.S. exports, with the trade deficit narrowing to an 11-month low in August, Commerce Department data showed Oct. 5.
Highlights of August Trade
• Deficit decreased 2.7% to $42.4 billion (estimated $42.7 billion) from a revised $43.6 billion in the prior month.
• Exports rose 0.4% to $195.3 billion, highest since December 2014, led by pharmaceuticals, cars, telecommunications equipment.
• Imports fell 0.1% to $237.7 billion on industrial supplies, capital goods.
The report indicates that an improving picture for the global economy is supporting demand for American goods and services. Exports of capital goods and non-petroleum exports were both the highest since April 2015, while the goods deficit was the smallest since October 2016.
At the same time, the merchandise-trade deficit with China, not adjusted for seasonal fluctuations, was the widest since September 2015 at $34.9 billion.
Trade and inventories are the two volatile components that feed into the government’s calculation of gross domestic product. In the last 12 quarters, for example, trade has contributed to growth five times and subtracted in seven periods.
The Commerce Department said the August data probably reflect “some of the initial effects” of Hurricane Harvey, which struck the Gulf Coast of Texas late in the month. The impacts from Hurricanes Harvey, Irma and Maria “will likely be reflected in subsequent reports,” the department said in a special notice included with the data.
• Merchandise-trade deficit narrowed to $63.3 billion from $63.8 billion; advance August figures showed $62.9 billion last week.
• After eliminating the effects of price fluctuations, which generates the numbers used to calculate GDP, the goods-trade gap was little changed at $61.8 billion.
• Exports of services rose 0.4% to a record $66.1 billion.
• Petroleum deficit, adjusted for inflation, widened to $9.1 billion from $6.7 billion.
• Exports and imports of goods accounted for about three-fourths of America’s total trade in 2016; the U.S. typically runs a deficit in merchandise trade and a surplus in services.
With assistance by Chris Middleton