US trade gap narrows to smallest since Oct 2021
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THE US merchandise-trade deficit narrowed in August to the smallest since October 2021 as both imports and exports dropped, suggesting a tailwind for economic growth in the third quarter.
The shortfall shrank 3.2 per cent to US$87.3 billion last month, Commerce Department data showed on Wednesday (Sep 28). The figures, which aren’t adjusted for inflation, compared with a median estimate for a gap of US$89 billion in a Bloomberg survey of economists.
Exports declined 0.9 per cent to US$179.8 billion, the first drop since January. Imports retreated for the fifth straight month to US$267.1 billion.
Inbound shipments of consumer goods advanced 4.5 per cent to US$283.2 billion. While imports of consumer merchandise have fallen from a record earlier this year, they remain well higher than the pre-pandemic average.
The dollar strengthened for a third straight month in August, lowering the cost of imports and making exports more expensive. The US currency has since gained even more, signaling further difficulty to exporters ahead.
Ports had for months been overwhelmed by an influx of goods that triggered supply-chain logjams and delivery delays, but that is showing signs of abating due to logistics improvements and as interest-rate increases start to weigh on demand.
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Retail inventories increased 1.4 per cent in August to a fresh record of nearly US$741 billion from a month earlier as companies stock up on merchandise amid still-uncertain supply chains. Stockpiles at wholesalers climbed 1.3 per cent to US$913.1 billion.
More complete August trade figures that include the balance on the services account will be released on Oct 5. BLOOMBERG
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