The overriding effect on U.S. August trade seemed to be lower oil prices, which narrowed the trade gap and suggest the gap should continue to narrow.
The August trade balance was a $59.1 billion deficit as imports fell $5.5 billion but exports retreated a lesser $3.4 billion. The trade balance was a $61.3 billion deficit in July after revision.
Imports of autos printed down $1.2 billion to their lowest level since March 2005, and oil and related items posted a $7.2 billion decline as price and volume dropped. The decline in oil imports came after five consecutive months of increases. Imports would have been lower if not for a $2.3 billion advance in consumer goods, as pharmaceuticals rose $1.5 billion and apparel gained $700 million, and a rise in services.
Services imports were up $900 million as royalties and license fees increased by that amount on payments for broadcast rights for the 2008 Summer Olympic Games. This was a one-time event, so imports will be lowered ahead.
Exports of autos posted a $1.7 billion decrease and non-monetary gold fell $900 million. These may suggest cutbacks on big-ticket luxury goods or other non-necessities as the U.S. economy slows.
The real trade gap is more than 8% narrower on average in July-August than the second quarter, which will add substantially to third-quarter growth in gross domestic product.
Unadjusted figures for the trade gap by country show China at a $25.3 billion deficit after a $24.9 billion gap in July, Japan at a $4.8 billion shortfall — its lowest since May 2003 — after $6.3 billion, and OPEC at a $19.2 billion deficit after $24.2 billion.
— Market News International