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US trade deficit narrows on strong exports
[WASHINGTON] In a report on Thursday, the Commerce Department said the trade gap declined 2.7 per cent to US$42.4 billion, the smallest since September 2016.
The department said the effects of Harvey, Irma and Maria would be "embedded in source data" for trade, and the impact of the hurricanes will likely be "reflected in subsequent trade reports until normal trade activities resume in affected areas."
Economists had forecast the trade shortfall narrowing to US$42.7 billion in August. When adjusted for inflation, the trade deficit was little changed at US$61.8 billion.
The so-called real trade deficit average for July and August was below the second-quarter average of US$62.4 billion.
That suggests trade could contribute to gross domestic product in the third quarter and help to soften the economic blow of the hurricanes.
The storms are expected to cut at least six-tenths of a percentage point from economic growth in the third quarter.
Trade added two-tenths of a percentage point to the second quarter's 3.1 per cent annualised growth pace.
In August, exports of goods and services increased 0.4 per cent to US$195.3 billion, the highest level since December 2014. Goods exports were the highest since April 2015.
There were increases in exports of consumer and capital goods.
Fuel exports, however, fell by US$0.7 billion. Food exports also declined. Exports to China increased 8.8 per cent.
Imports of goods and services dipped 0.1 per cent to US$237.7 billion in August.
Imports of industrial supplies and materials were the lowest since November 2016.
There were also declines in capital goods imports. Motor vehicle imports, however, increased in August.
Imports of goods from China were up 5.1 per cent to a record high. The politically sensitive US-China trade deficit rose 4 per cent to US$34.9 billion in August, the highest level since September 2015.