U.S. Trade Deficit at 18-Month Low

The small increase was significantly better than the consensus estimate for growth in the deficit to $44 billion.

U.S. exports to Europe fell 11.7%, and the trade deficit with Europe rose to $12 billion in August from $8.4 billion in July. The deficit with China rose to $29.4 billion from $27.4 billion in July. The U.S. enjoyed trade surpluses with Australia ($2.1 billion) and Hong Kong ($1.8 billion), among others. Lower crude oil prices also helped keep the trade deficit lower.

The largest drop in exports came in industrial supplies and materials ($2.4 billion). No other category fell by at least $1 billion. The largest increase in exports came in foods, feed and beverages ($1.8 billion) and capital goods ($0.1 billion).

Imports fell the most in industrial supplies and materials ($2.1 billion) and capital goods ($0.6 billion). Imports increased in automotive vehicles, parts and engines ($0.5 billion) and consumer goods ($0.4 billion).

The drop in both exports and imports indicates just how weak the global and domestic economy is currently. That a slow-motion economy gets the credit for keeping the trade deficit in check is not really such good news.

Paul Ausick