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US Trade Deficit Grew Handily in August

The reading on international trade, known as the U.S. trade deficit to those who have been watching the reading since the 1980s and 1990s, came in at -$48.3 billion in the month of August. Bloomberg was calling for -$48.6 billion, and the pool of economists from Econoday had a range of estimates as -$50.2 billion to -$41.0 billion.

August’s reading was up $6.5 billion from the revised -$41.8 billion reading from July. The Bureau of Economic Analysis (BEA) said that August’s exports were down $3.7 billion in July at $185.1 billion, and August’s imports were up $2.8 billion from July at $233.4 billion.

Tuesday’s report said:

The August increase in the goods and services deficit reflected an increase in the goods deficit of $6.6 billion to $67.9 billion and an increase in the services surplus of $0.1 billion to $19.6 billion. … Year-to-date, the goods and services deficit increased $17.6 billion, or 5.2 percent, from the same period in 2014. Exports decreased $58.9 billion or 3.8 percent. Imports decreased $41.3 billion or 2.2 percent.

What is interesting here is that Bloomberg indicated the iPhone helped to drive the deficit higher. A look at the BEA data showed that imports of goods on a Census basis increased $3.3 billion, with consumer goods increasing $4.0 billion — cell phones and other household goods increased by $2.1 billion.

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The deficit with China increased $4.2 billion to $32.9 billion in August. The deficit with the European Union increased $2.1 billion to $14.5 billion in August. Here is a country breakdown basis for U.S. trade partner nations with surpluses, in billions of dollars: South and Central America ($3.3) and OPEC ($1.0).

Deficits were recorded, in billions of dollars, as follows:

  • China ($32.9)
  • European Union ($14.5)
  • Germany ($6.8)
  • Mexico ($5.3)
  • Japan ($5.2)
  • South Korea ($2.7)
  • Canada ($2.2
  • Italy ($2.1)
  • France ($2.0)
  • India ($1.9)
  • United Kingdom ($0.3)
  • Brazil ($0.2)
  • Saudi Arabia (less than $0.1)

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By Jon C. Ogg