August trade deficit widens as services imports rise to record

Washington

THE US trade deficit unexpectedly widened in August, as higher imports of capital goods and record purchases of services from abroad overshadowed a gain in exports.

The gap grew by 3 per cent from the prior month to US$40.7 billion, Commerce Department figures showed on Wednesday in Washington. The median forecast in a Bloomberg survey of economists called for a deficit of US$39.2 billion. Imports posted a 1.2 per cent rise, while exports increased 0.8 per cent.

Services imports jumped by US$1.5 billion to US$43 billion, with most of the rise coming from charges for use of intellectual property that may reflect a temporary boost from rights fees to broadcast the Olympic Games. Improvement in global markets and the dissipating effect of the strong dollar are likely to aid exports and help the expansion in the…