US goods trade deficit widens sharply in August

[WASHINGTON] The US trade deficit in goods widened sharply in August amid a surge in imports, suggesting that trade could remain a drag on economic growth in the third quarter.

The goods trade shortfall increased 11.5 per cent to US$132.6 billion last month, the Commerce Department’s Census Bureau said on Wednesday (Sep 30). Economists polled by Reuters had forecast the goods deficit at US$115.0 billion.

Goods imports soared US$17.4 billion, or 5.5 per cent, to US$336.1 billion. They were driven by a 16.6 per cent jump in imports of industrial supplies, which include petroleum. Capital goods imports rose 4.0 per cent amid an AI infrastructure buildout. Food imports increased 5.5 per cent. But consumer goods imports fell 1.6 per cent.

Exports of goods advanced US$3.7 billion, or 1.9 per cent, to US$203.4 billion. Exports of industrial supplies rose 8.3 per cent. But shipments of consumer goods dropped 10.5 per cent, while those of motor vehicles and parts decreased 6.9 per cent. Food exports declined 5.6 per cent.

Trade has subtracted from gross domestic product for three straight quarters. Some of the hit from the trade deficit on GDP growth could be blunted by rising inventories. The Census report showed wholesale inventories increased 0.7 per cent in August while stocks at retailers climbed 0.3 per cent. REUTERS