US goods trade deficit contracts sharply in August

[WASHINGTON] The US trade deficit in goods contracted sharply in August amid a plunge in imports, government data showed.

The goods trade gap narrowed 16.8 per cent to US$85.5 billion last month, the Commerce Department’s Census Bureau said on Thursday (Sep 25). Economists polled by Reuters had forecast the goods trade deficit shrinking to US$95.2 billion.

Imports of goods dropped US $19.6 billion to US$261.6 billion. Goods exports fell US$2.3 billion to US$176.1 billion.

President Donald Trump’s tariffs have caused wild swings in goods imports this year, undercutting GDP in the first quarter before boosting growth in the April-June quarter.

Growth estimates for the third quarter are currently converging around a 2.5 per cent annualised rate. The economy grew at a 3.8 per cent pace in the April-June quarter, with a smaller trade deficit the key driver. REUTERS