The U.S. foreign trade deficit in August narrowed very slightly to $57.6B from $59.0B in July which was revised slightly shallower from the initial report. The August deficit was below Consensus expectations for a deficit of $58.7B.

The August deficit was the lowest since January and the average deficit of $59.0B during the last eight months compares to an average of $64.7B during the first eight months of 2006.

U.S. exports rose just 0.4%, the smallest monthly increase since April.

Exports of goods rose 0.4% (13.3% y/y) though exports of capital goods fell 0.6% ( +9.9% y/y). Exports of advanced technology goods exports rose 4.8% (8.9% y/y) and recouped most of the prior month's 8.6% drop. Exports of autos & products fell 8.4% (+10.3% y/y) after a 14.5% surge during July. Exports of nonauto consumer goods worked the other way and rose 1.5% (12.9% y/y) while exports of foods, feeds & beverages surged 8.7% (26.2% y/y).

U.S. exports of services rose 0.6% (11.8% y/y) after a slight slip during July. The modest increase came as exports of travel surged 2.0% (14.8% y/y) and passenger fares also surged by 2.0% (11.7% y/y).

Overall imports fell 0.4% though imports of petroleum products rose 4.4% (-3.0% y/y) as the price per barrel of crude petroleum rose 3.9% (3.0% y/y). Imports of nonauto consumer goods fell 0.5% (+5.1% y/y) though capital goods imports rose 0.9% (+3.4% y/y). Imports of advanced technology products made up all of the prior month's decline and rose 3.1% (12.1% y/y).

The U.S. trade deficit in goods with China improved slightly m/m to $22.5B versus a deficit of $22.0B the during August of '06.

International Trade: Why We Don’t Have More of It from the Federal Reserve Bank of Philadelphia is available here.

Is the United States Losing Its Productivity Advantage? from the Federal Reserve Bank of New York can be found here.