US Trade Gap Widened Amid Slowing Global Growth, Strong US Dollar
- The US trade deficit increased 15.6 percent in August to $41.81 billion
- Exports from the US decreased 2% from July to $185.1 billion
- A growing deficit with trading partners may indicate the pressure of a strong US dollar
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The US trade deficit widened in August as exports dropped to their lowest level in nearly three years. The US Department of Commerce issued a report Tuesday morning that revealed the US trade gap rose more than expected to a $48.3 billion shortfall in August. The department had also revised its estimate for July’s deficit to $41.81 billion from the initial reading of $41.86 billion. The increase in August’s reading made it a 15.6 percent jump from July. Economist surveyed by Bloomberg had forecasted a trade deficit reading of $48.0 billion for August with the actual reading posting 6.8 percent above expectations.
In the breakdown, imports increased $2.8 billion (1.2 percent) from July to $233.5 billion in August. Exports decreased $3.7 billion (2 percent) from July to $185.1 billion in August. Both slowing global growth and a rising dollar seem to be contributing to pressure on US exports while simultaneously making imports cheaper. The deficit with two of the largest US trading partners, China and the European Union, increased 10.7 percent and 9 percent respectively.
The US Dollar had a tepid initial reaction to the trade balance data but has since continued downward movement from its session high of 12068.51, to as low as 12011, a 0.47 percent decrease.
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