Data released Thursday morning show the U.S. trade deficit increased slightly in August. In a belated statement — initially due out October 8 but delayed thanks to the partial government shutdown — the U.S. Bureau of Economic Analysis reported that the trade gap increased from -$38.6 billion in July to -$38.8 billion in August.
Total August exports increased by $0.1 billion to $189.2 billion and total imports were effectively flat at $228 billion, yielding a trade deficit narrower than the $40 billion economists were expecting. However, while the trade gap widened sequentially, it was still low relative to the same period last year. Compared to August 2012, exports are up 3.9 percent and imports are up 0.9 percent; the year-ago trade gap was larger by $5.2 billion.
For the three months ended in August, the U.S. ran an average trade deficit of $37.3 billion, down from an average deficit of $39 billion in the three-month period ended July.
At a glance, the trade data are consistent with what other economic indicators have suggested over the past few months. America’s domestic economy is recovering at a slow but steady clip, generating a reasonable amount of demand for imports, while a slower recovery in Europe has generally dampened exports.
The only major trading partner with which the U.S. increased it surplus in August was Singapore, from $0.6 billion to $1.1 billion. Deficits shrank with most major trading partners including China, from $30.1 billion to $29.9 billion, and the European Union, from $13.9 billion to $9.8 billion, and increased slightly with trade partners like Mexico, from $4.1 billion to $4.9 billion.
The total U.S. goods deficit increased by $0.1 billion to $58.2 billion, while the services surplus was virtually unchanged, at $19.4 billion.
The trade report can be used as an indicator of both the health of the U.S. economy and the health of foreign economies. Strong imports typically suggest that the domestic economy is doing well because demand for foreign goods is high, and strong exports suggest the same for foreign economies. Because of the partial shutdown, the next report, originally scheduled to be released on November 5, will be released on November 14. The report scheduled for December 5 will come out on time.
A separate report released on Wednesday showed that import and export price pressures remained soft in September. The price index for imports increased 0.2 percent on the month following a 0.2 percent increase in August. Price pressure within imports was once again led by increases in fuel prices, which climbed 0.6 percent on the month following a 1.6 percent increase in the previous month. Non-fuel import prices climbed just 0.1 percent. On the year, import prices are down 1 percent.
Export prices climbed 0.3 percent in September, breaking a six-month decline and foiling expectations for a 0.1 percent decline. Export prices have declined for most of the past year and are down 1.6 percent compared to last September. Export prices have also declined for both agricultural and nonagricultural products.