Trade gap widens 13.8% to $105.6 billion on solid domestic demand
SPY•The U.S. trade deficit widened 13.8% in August to $105.6 billion, $3.6 billion more than analysts expected, as imports rose faster than exports. The goods deficit with China grew 6.0% to $18.4 billion.
1. Imports rise faster
U.S. exports increased 1.4% in August, while imports rose 4.3%. The goods deficit grew 10.3%, and the services surplus was essentially unchanged.
2. Demand and trade
Carl Weinberg, chief economist at High Frequency Economics, called the widening deficit a symptom of excess demand and said it pointed to an inflation challenge. Net trade has detracted from headline GDP in eight of the last 10 quarters.
