WASHINGTON – The U.S. trade deficit narrowed in August, reflecting an increase in exports and a downtick in imports as Hurricane Harvey disrupted shipping along the Gulf Coast.
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The foreign-trade gap in goods and services narrowed 2.7% from the prior month to a seasonally adjusted $42.395 billion in August, the Commerce Department said Thursday. Economists surveyed by The Wall Street Journal had expected a trade deficit of $42.7 billion.
Imports decreased 0.1% in August, and exports increased 0.4% from July. August exports of goods and services reached the highest level since December 2014, and exports of services were the highest on record, not adjusted for inflation.
Exports of goods increased a slight $600 million, while imports of goods decreased $300 million, underpinned by volatility in the energy category.
"The most obvious theme is that energy exports were disrupted and energy imports rose, presumably in reaction to Harvey," said Stephen Stanley, chief economist at Amherst Pierpont Securities, in a note to clients.
The Commerce Department said the effects of Hurricanes Harvey, Irma and Maria couldn't be isolated in Thursday's trade report, but "will likely be reflected in subsequent reports until normal trade activities resume in affected areas."
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Figures on international trade can be volatile from month to month. In the first eight months of 2017, the value of U.S. imports rose 6.4% and U.S. exports increased 5.8% compared with the same period a year earlier. The overall trade deficit was up 8.8% compared with the first eight months of 2016.
The dollar has weakened this year, making U.S. exports cheaper for foreign customers, and consumer spending in the U.S. has been solid, aiding import purchases.
The U.S. imports more goods than it exports, though it runs a more modest trade surplus for services.
The U.S. economy has run trade deficits for decades, during both economic expansions and recessions, which economists say reflects the fact that Americans consume more than they produce relative to the rest of the world. To shrink or even eliminate the gap, the U.S. would either have to produce more or consume less.
Looking at only trade in goods, August imports to the U.S. from China were $45.8 billion, the highest on record.
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(END) Dow Jones Newswires
October 05, 2017 10:10 ET (14:10 GMT)