US trade deficit widens in August as exports slow
- The yawning US trade deficit rose by nearly $1 billion in August as weakening foreign demand.
- The deficit is up more than 7 percent in the first eight months of the year over the same period of 2018.
- Imports increased 0.5 percent, while exports rose 0.2 percent, rising more slowly than in July.
WASHINGTON: The yawning US trade deficit rose by nearly $1 billion in August as weakening foreign demand and the churning trade conflict ate into US exports, the government reported Friday.
Meanwhile, the strong US dollar fueled American imports of consumer items like mobile telephones as well as semiconductors and industrial equipment, according to the Commerce Department data.
As a result, the US trade balance crept 1.6 percent higher to $54.9 billion for the month, surpassing economists’ expectations.
Imports increased 0.5 percent, while exports rose 0.2 percent, rising more slowly than in July.
The deficit is up more than 7 percent in the first eight months of the year over the same period of 2018.
The unexpected increase in August could weigh on GDP calculations for the third quarter while a global economic slowdown is expected to weaken US exports toward the end of the year.
Boeing’s travails continued to weigh on exports, as civilian aircraft sales fell $1.3 billion.
Demand for services, an area in which the United States typically enjoys a broad surplus, has waned since the summer while services imports are now at their highest on record.
Industrial surveys released this week suggest a steep drop in demand for US exports is likely later in the year, and the punishing duty rates President Donald Trump announced in August should further weigh on trade.
The August figures also showed a deepening decline in goods exchanged with China, Mexico and the European Union.
But the general trend this year of imports from Mexico rising while Chinese imports steadily recede, continued uninterrupted.
So far in 2019, the US goods deficit with Mexico has surged 30.6 percent but with China it has declined 11.7 percent with China.