The U.S. trade deficit jumped almost 9% in August, much worse than expected, as the gap with China swelled to a new record high, government data showed on Oct. 14.
The Commerce Department reported the August trade deficit rose to $46.3 billion in August, up from a downwardly revised July deficit of $42.6 billion.
The August trade gap was far worse than economists predictions that it would widen to $44.5 billion. In July the deficit had narrowed.
Despite an increase in exports of goods and services, which reached their highest level since August 2008, imports surged more strongly, the data showed. Imports increased 2.1% from July, to $200.2 billion, while exports edged up 0.2% to $153.9 billion.
The August trade deficit was the worst since June's $49.8 billion gap, the biggest since October 2008 as the global financial crisis accelerated, and confirmed a trend of widening gaps that began in mid-June 2009.
In August, exports of goods were virtually flat, while imports of goods jumped $3.9 billion to $166.7 billion. Imports of consumer goods led the increase, rising by $1.4 billion.
The gap with China expanded 8% to a new record of $28 billion, wiping out the previous record of $27.9 billion in October 2008.
"Today's report on the August trade numbers should serve as a wakeup call to policymakers in Washington as to the benefits of lowering trade barriers abroad for U.S. exporters, " said Dave Huether, Chief Economist for National Association of Manufacturers." Given that exports remain unchanged from July to August, yet imports increased, reminds us how critical it is to reducing trade barriers and taking the steps outlined in the NAM's "Blueprint to Double Exports in Five Years" to help meet the goal of the President's National Export Initiative. Further, dozens of free trade agreements are currently being negotiated around the world while the U.S. sits on the sidelines. If we dont see any movement on our agreements with other countries, these numbers could become very alarming in the future."
Copyright Agence France-Presse, 2010, IW Staff