Financial News: U.S. Trade Deficit Narrows In August As Imports

U.S. Trade Deficit Narrows In August As Imports Plunge

(RTTNews) - A report released by the Commerce Department on Wednesday showed the U.S. trade deficit narrowed significantly in the month of August amid a steep drop in the value of imports.

The Commerce Department said the trade deficit shrank to $59.6 billion in August from a revised $78.2 billion in July.

Economists had expected the trade deficit to decrease to $61.0 billion from the $78.3 billion originally reported for the previous month.

The narrower trade deficit came as the value of imports plunged by 5.1 percent to $340.4 billion in August after spiking by 5.9 percent to $358.8 billion in July.

The report showed a steep drop in imports of industrial supplies and materials, particularly non-monetary gold, as well as notable decreases in imports of consumer goods and capital goods.

Meanwhile, the Commerce Department said the value of exports crept up by 0.1 percent to $280.8 billion in August after rising by 0.3 percent to $280.6 billion in July.

A jump in exports of computers was largely offset by declines in exports of pharmaceuticals and non-monetary gold.

"Excluding gold, imports fell by a more modest 3.5%, while exports rose 0.2%," said Grace Zwemmer, Associate Economist at Oxford Economics. "Imports have gone down less than anticipated after frontloading earlier this year, adding downside risk to our Q3 GDP forecast."

The report also said the goods deficit narrowed to $85.6 billion in August from $103.7 billion in July, while the service surplus inched up to $26.1 billion in August from $25.6 billion in July.

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