US trade deficit widens in August amid strong imports
SPY•The US trade deficit widened 13.7% to $105.6 billion in August, above economists’ forecast of $102.0 billion, as imports rose 4.3% to $420.8 billion. Economists estimate trade could subtract as much as 2.5 percentage points from third-quarter GDP.
1. Imports drive deficit
The US trade deficit widened more than expected in August as imports of goods surged amid robust domestic demand. Imports rose 4.3% to $420.8 billion, including a 5.3% increase in goods imports to $342.2 billion.
2. Exports also rise
Exports increased 1.4% to $315.2 billion, while goods exports rose 2.2% to $205.7 billion. The $105.6 billion trade shortfall was up 13.7% from July; economists had forecast $102.0 billion.
3. GDP estimates
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 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.
