Ilfede/Dreamstime
Container Ship International Trade Ship Boat Ilfede Dreamstime 633e4de175b48

US Trade Deficit Narrows in August on Further Imports Drop

Oct. 6, 2022
Higher interest rates have strengthened the U.S. dollar, making American goods relatively more expensive, which could trim exports, but so far the data are likely to boost growth in the world's largest economy.

The U.S. trade gap declined for a fifth straight month in August as imports, including oil, fell further, according to official data released Wednesday.

Exports edged down as well on decreases in industrial supplies and materials, the Commerce Department said.

The overall trade deficit dropped $3.1 billion to $67.4 billion in August, the data showed, slightly more than expected.

In recent months, companies have rushed to replenish depleted inventories to meet strong demand from U.S. consumers.

But soaring inflation has raised concerns that shoppers will pull back, causing firms to become more cautious.

The Federal Reserve has been raising interest rates aggressively to dampen demand and cool inflation, and many families have to spend a greater share of their incomes on staple goods.

U.S. goods and services imports fell by $3.7 billion to $326.3 billion in August, a decline fueled by a $2.7 billion drop in crude oil imports amid falling global energy prices.

Exports dropped $700 million in August, with a dip seen in shipments of automotive vehicles, parts, and engines, as well as a slight decrease in travel.

The U.S. deficit with China stood at $33.5 billion, up slightly from July, and the highest since November 2018.

"The data reported so far for (the third quarter) suggest trade will once again contribute positively to GDP," Rubeela Farooqi of High Frequency Economics said in an analysis.

But she cautioned that "weaker global growth prospects suggest trade flows will slow," as a strong dollar and softer foreign demand weigh on exports.

Higher interest rates have strengthened the U.S. dollar, making American goods relatively more expensive, which could trim exports, but so far the data are likely to boost growth in the world's largest economy.

Copyright 2022, Agence France-Presse

About the Author

Agence France-Presse

Copyright Agence France-Presse, 2002-2017. AFP text, photos, graphics and logos shall not be reproduced, published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP shall not be held liable for any delays, inaccuracies, errors or omissions in any AFP content, or for any actions taken in consequence.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!