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Economy in Brief

U.S. Trade Deficit Unexpectedly Deepens to Record in August
by Tom Moeller  October 5, 2021

• Exports are little changed.

• Petroleum & nonpetroleum imports both increase.

• Deficit with China deepens to four month-low.

The U.S. trade deficit in goods and services increased to $73.25 billion during August from $70.30 in July, revised from $70.05 billion. The latest deficit was a record for the series which extends back to January 1992. A deficit of $70.50 billion was expected in the Action Economics Forecast Survey. Exports edged 0.5% higher in August (22.6% y/y) following a 1.2% July gain while August imports rose 1.4% (20.6% y/y) after easing 0.1% in July.

The trade deficit in goods deepened to $89.41 billion from $87.82 billion, revised from $86.82 billion in July. It compared to a $87.60 billion deficit in the advance report issued last week. Exports of goods rose 0.7% (25.8% y/y) after a 1.8% jump in July. Holding back the export increase, auto exports fell 8.0% (-6.8% y/y) following a 5.3% rise. Food exports were off 5.0% (5.2% y/y) after a 0.4% rise. Capital goods exports fell 1.9% (+20.1% y/y) after a 2.3% gain. To the upside, industrial supplies & materials exports rose 6.6% (46.7% y/y) after a 0.4% gain. Nonauto consumer goods exports strengthened 1.6% (27.6% y/y) in August after rising 4.5% in July.

Imports of goods rose 1.0% in August (18.1% y/y) and reversed July's decline. Industrial supplies & materials imports rose 3.3% (49.3% y/y) after falling 2.8% in July. Nonauto consumer goods imports improved 4.9% (10.4% y/y) after two consecutive monthly declines. Falling by 1.5% (+17.2% y/y) were foods, feeds & beverage imports after they eased 0.5% in July. Capital goods imports slipped 0.4% (+15.7% y/y) after little change in July. Auto imports fell 5.2% (+0.6% y/y) after a 3.8% increase.

Petroleum imports rose 1.4% in August (97.3% y/y) after a 3.7% gain. The rise occurred despite a decline in the price of crude oil to an average $65.06 per barrel from $65.24 in July. The price was substantially higher than $37.56 per barrel one year earlier. Nonpetroleum imports rose 1.0% (14.3% y/y) after falling 1.4% in July.

The real (adjusted for price changes) trade deficit in goods deepened to $101.8 billion (chained 2012 dollars) in August from $99.8 billion in July. Real exports of goods gained 0.5% (8.0% y/y) after a 1.1% rise. Real imports of goods increased 1.1% (8.9% y/y) following a 1.4% July decline.

The surplus of trade in services narrowed sharply in August to $16.2 billion from $17.5 in July. It was the smallest surplus since December 2011 The value of services exports edged 0.1% lower for a second month (+15.8% y/y) as travel exports declined 5.1% (+54.5% y/y). Service imports rose 2.8% (32.7% y/y) including an 8.1% rise (406.2% y/y) in travel.

The trade deficit with China deepened to a seasonally adjusted $28.1 billion from $25.0 billion in July. Exports fell 13.6% (+1.5% y/y) while imports rose 3.5% (2.8% y/y). The trade deficit with Japan eased slightly to $5.6 billion as exports rose 6.1% (19.2% y/y) and imports fell 0.9% (+24.6% y/y). The deficit with the European Union deepened to $19.3 billion from $18.1 billion. Exports rose 3.8% (22.5% y/y) and imports increased 4.9% (20.7% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.

Foreign Trade in Goods & Services (Current $) Aug Jul Jun Aug '20 2020 2019 2018
U.S. Trade Deficit ($ bil.) 73.25 70.30 73.23 63.73 676.69 576.34 580.95
Y/Y%
Exports of Goods & Services (% Chg) 0.5 1.2 0.6 22.6 -15.6 -0.4 6.2
Imports of Goods & Services (% Chg) 1.4 -0.1 2.2 20.6 -9.5 -0.5 7.4
  Petroleum (% Chg) 1.4 3.7 2.9 97.3 -39.7 -14.0 20.8
  Nonpetroleum Goods (% Chg) 1.0 -1.4 1.7 14.3 -3.5 -0.5 7.3
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