With the value of imports rising by more than the value of exports, the Commerce Department released a report on Friday showing the U.S. trade deficit widened by more than anticipated in the month of August.
The report said the trade deficit widened to $54.9 billion in August from $54.0 billion in July, while economists had expected the trade deficit to widen to $54.5 billion.
The wider trade deficit came as the value of imports climbed by 0.5 percent to $262.8 billion in August after edging down to $261.4 billion in July.
Significant increases in imports of cell phones and other household goods, semiconductors, and other industrial machines were partly offset by a steep drop in imports of industrial supplies and materials.
Meanwhile, the report said the value of exports rose by 0.2 percent to $207.9 billion in August after climbing to $207.4 billion in July.
Exports of fuel oil, non-monetary gold, and soybeans saw notable growth, although exports of civilian aircraft showed a steep drop.
“In real terms, exports and imports are both on course for growth of around 4% annualized in the third quarter, stronger than we had assumed,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.
He added, “But that would still make net trade a small drag on third-quarter GDP growth, which we expect to come in at 1.5% annualized, and the darkening global backdrop suggests that drag will continue into the fourth quarter.”
The Commerce Department also said the goods deficit widened to $74.4 billion in August from $73.6 billion in July, while the services surplus slipped to $19.5 billion from $19.6 billion.
The material has been provided by InstaForex Company – www.instaforex.com