Trade Deficit in the U.S. Widened in August as Exports Dropped

By Alex Kowalski - Oct 11, 2012 8:30 PM GMT+0800 The U.S. trade deficit widened in August as slower global growth reduced demand for American exports. The gap grew 4.1 percent to $44.2 billion from $42.5 billion in July, Commerce Department figures showed today in Washington. Exports decreased to the lowest level since February. A separate report showed the cost of goods shipped to the U.S. rose more than forecast in September. A stagnant Europe and slower growth in China and other emerging markets may curtail demand for American products, which had been a source of strength for U.S. manufacturers earlier this year. At the same time, the pickup in energy costs may push up the nation’s import bill, keeping the trade gap elevated. “You have these headwinds from overseas,” Ryan Wang, an economist at HSBC Securities USA Inc. in New York, said before the report. “There’s an ongoing recession in Europe and growth momentum is positive but slowing in the other parts of the world that matter most for U.S. exports.” The median forecast in a Bloomberg survey of 73 economists projected the deficit would expand to $44 billion. Estimates ranged from a gap of $41 billion to $47.5 billion. July’s deficit was revised from an initially reported $42 billion. Fewer Americans than forecast filed first-time claims for unemployment benefits last week, which may reflect difficulty adjusting the data for seasonal swings at the start of a new quarter, figures from the Labor Department also showed today. Applications for jobless benefits dropped 30,000 to 339,000 in the week ended Oct. 6, the fewest since February 2008. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. One state accounted for most of the plunge in claims, a Labor Department spokesman said as the data were issued to the press. Exports Decline The trade report from the Commerce Department showed exports decreased 1 percent in August to $181.3 billion. Imports decreased 0.1 percent to $225.5 billion, also the weakest since February, from $225.7 billion in the prior month. A drop in purchases of autos, clothing and aircraft swamped a jump in oil imports. After eliminating the influence of prices to produce the numbers used to calculate gross domestic product, the trade deficit climbed to $48.4 billion from $47 billion.