The US goods trade deficit narrowed in August amid falling imports, due to slowing domestic demand as the Federal Reserve (Fed) aggressively tightens monetary policy to curb inflation.
With the monthly reduction in August, the United States adds five consecutive months of decrease in the trade balance.
The goods trade deficit shrank 3.2% to $87.3 billion last month, down $2.9 billion from the $90.2 billion recorded in July, the Commerce Department said Wednesday.
Goods exports fell $1.7bn to $179.8bn. Imports fell $4.6bn to $267.1bn; while, wholesale inventories registered an increase of 1.3%, while retail grew 1.4% last month, the US Census Bureau said.
The report released Wednesday by the Commerce Department suggests that trade will once again contribute to Gross Domestic Product in the third quarter. The economy could also be helped by large increases in wholesale and retail inventories last month.
“Trade should be positive for third-quarter GDP,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Still, the third quarter is not shaping up to be overly impressive.”
When it comes to new orders for durable goods, there was a drop of 600,000 million dollars in August (0.2%) compared to July to 272,700 million dollars, which adds up to two consecutive months of declines, the Census Bureau reported on Tuesday. EU.
The decrease in the deficit may be a consequence of a weakened internal demand, since imports of industrial supplies contracted by 6.9% per month and consumer goods by 0.2% per month, explains Gabriela Siller, director of economic-financial analysis at Banco Base.
Imports of capital goods fell by 1.8%, while imports of consumer goods fell by 0.2%. However, imports of food, motor vehicles and other goods increased, boosting retail inventories.
Goods exports subtracted $1.7 billion to $179.8 billion. The decline was led by motor vehicles, which fell 8.9%. Exports of industrial supplies fell 3.5%, but those of consumer goods increased 8%. Exports of food, capital goods and other goods also grew.
Record exports and moderating consumer spending were the economy’s only bright spots in the second quarter, helping to limit the impact on GDP of a sharp slowdown in the pace of inventory buildup.
With information from Reuters