US trade gap widens in August as imports jump

WASHINGTON: The US trade deficit rose in August with imports overwhelming exports as the US economy bounces back from last year’s pandemic shock, government data showed on Tuesday.

The Commerce Department reported the trade deficit climbed to $73.3 billion from the upwardly revised $70.3 billion the month prior, more than analysts had expected and 4.2% higher than in July.

Both exports and imports increased, but fewer car and plane sales held back the former, while consumer demand fueled the rise in the latter, according to the data.

The overall deficit was a new record high and $31.7 billion larger than before the pandemic, said Mahir Rasheed of Oxford Economics, who predicted it would widen “slightly further” by the end of the year as vaccine inequality and supply snarls global growth.

“Moderating domestic demand will continue to slow import volumes over the coming months, while a steady pick up in foreign consumption will drive stronger exports in the fourth quarter,’’ he added.

Overall, imports rose $4 billion to $287 billion from July, while exports climbed to $213.7 billion, an increase of $1 billion.

Imports of both goods and service increased, with consumer goods rising $3 billion and industrial supplies and materials rising $1.8 billion.

Automobiles fell $1.5 billion amid an ongoing shortage of semidconductors that has hurt assembly lines worldwide.

Among exports, goods increased a total of $1.1 billion, with industrial supplies and materials rising $3.5 billion.

However, that could not overcome a $1 billion drop in automobiles and $0.8 billion fall in capital goods, which includes aircraft, among other shortfalls.