International Trade: Modestly Larger Deficit

October 5, 2016
Bottom Line: The trade deficit widened modestly in August with both exports and imports increasing modestly. The July/August average for real trade balance for goods is moderately below its Q2 levels, suggesting a positive contribution to the Q3 GDP. The International Trade Deficit WIDENED by $1.2 billion to $40.7 billion in August, compared with market expectations for an decline to a $39.2 billion deficit. For the first 8 months of the year, the trade deficit has averaged $41.3 billion, slightly below from the average of $41.9 billion for the same period in 2015. Exports ROSE by 0.8% to $187.9 billion after an increase of 1.9% in the prior month. The declines in capital goods and food, feed, and beverageswere more than offset by increases in industrial supplies and materials and motor vehicles and parts. Export growth is now 0.7% ABOVE their year ago level. Imports ROSE by 1.2% to $228.6 billion after a decline of 0.7% in the prior month. The declines in industrial supplies and materials and consumer goods were more offset by increases in capital goods and other goods. In August, oil imports increased. Oil imports 2016 year-to-date levels are now moderately below the 2015 year-to-date levels. Imports are now 1.2% BELOW their year ago level.