US trade gap yawns wider as imports outpace exports in August

WASHINGTON: The US trade deficit rose in August with imports overwhelming exports, as the US economy bounces back from last year’s pandemic shock, government data said on Tuesday.

The Commerce Department reported the trade deficit climbed to $73.3 billion from the upwardly revised $70.3 billion a month ago, more than analysts had expected and 4.2 per cent higher than in July.

Both exports and imports increased, but a fewer car and airplane sales held back the former, while consumer demand fuelled the rise in the latter, according to the data.

The overall deficit was a new record high and $31.7 billion larger than before the pandemic, Mahir Rasheed of Oxford Economics said, who predicted it would widen “slightly further” by the end of the year, as vaccine inequality and supply snarls global growth.

“Moderating domestic demand will continue to slow import volumes over the coming months, while a steady pick up in foreign consumption will drive stronger exports” in the fourth quarter, he added.

Overall, imports rose $4 billion to $287 billion from July, while exports climbed to $213.7 billion, an increase of $1 billion.

Imports of both goods and services increased, with consumer goods rising $3 billion and industrial supplies and materials rising $1.8 billion.

Automobiles fell $1.5 billion, amid an ongoing shortage of semiconductors that has hurt the assembly lines worldwide.

Among exports, goods increased a total of $1.1 billion, with industrial supplies and materials rising $3.5 billion. However, that could not overcome a $1 billion drop in automobiles and $0.8 billion fall in capital goods, which includes aircraft, among other shortfalls. Services exports saw a slight decrease.