Record imports push US trade balance deep into the red in August
SPY•The US trade deficit widened 13.7% to $105.6 billion in August, its highest level in 17 months, as imports rose 4.3% to a record $420.8 billion. Exports increased 1.4% to $315.2 billion.
1. Imports reach record high
The US trade deficit widened more than expected in August as imports jumped to a record, the Commerce Department’s Bureau of Economic Analysis and Census Bureau said. The shortfall reached $105.6 billion, compared with economists’ forecast of $102.0 billion.
2. Goods trade widened
Goods imports increased 5.3% to $342.2 billion, led by industrial supplies and materials and a record $146.4 billion in capital goods imports, driven by semiconductors and other industrial machinery. Exports rose 1.4% to $315.2 billion, including a 2.2% increase in goods exports to $205.7 billion.
3. Trade may weigh on growth
Trade has subtracted from GDP for three straight quarters, and economists estimate it could cut as much as 2.5 percentage points from third-quarter GDP growth. Growth estimates for July through September are mostly above a 3.0% annualized rate, with consumer spending expected to offset the drag from imports.
