Courtesy of Mish.
The trade deficit shrank from -$44.655 billion in June to -$39.547 billion in July.
Economists, being the a perpetually optimist lot expected the gap to narrow further.
The Econoday Consensus estimate for August was -$39.0 billion, but the deficit actually rose slightly to -$40.7 billion.
Supposedly this is a “subtle positive“. Let’s take a look.
Highlights
The nation’s trade deficit widened by $1.2 billion in August to $40.7 but details are positive. Exports of capital goods, excluding aircraft, actually rose slightly to $37.6 billion while imports of capital goods were up $1.2 billion to $50.2 billion. These results hint at badly needed strength for cross-border business investment. When including aircraft, however, capital goods exports fell $0.7 billion in what is the lowest result in nearly 5 years.
Total exports in August rose 0.8 percent, which is another positive, while imports rose 1.2 percent. The gain for imports is a subtraction in the national accounts but it does point to solid domestic demand, specifically once again for capital goods. The trade gap for goods is unchanged from July at $60.3 billion while the trade surplus for the nation’s services, in what is a superficial negative in the report, fell $1.2 billion to $19.6 billion for the lowest showing since December 2013. But the dip in services reflects $1.2 billion in broadcast payments for the Olympics.
Today’s results may lower third-quarter GDP estimates but the export reading excluding aircraft is a subtle positive for the economic outlook.
Trade Highlights
Let’s dive into the Census Bureau Report on international trade data for more details.
- August real dollar exports ($123.0 billion) were the highest since December 2014 ($123.0 billion).
- August exports of capital goods ($42.1 billion) were the lowest since September 2011 ($41.6 billion).
International Trade
