- U.S. Trade Deficit Improves to 11-month Low in August
The weak U.S. dollar and improving global demand are aiding exports in the world’s largest economy.
Trade deficit decreased by 2.7 percent to $42.4 billion in August, Commerce Department report showed on Thursday. Down from a revised $43.6 billion in July.
Exports climbed 0.4 percent to $195.3 billion, the highest since December 2014. While imports fell just 0.1 percent to $237.7 billion on capital goods and industrial supplies.
The report showed improved global economy is supporting demand for American goods and services. Exports of capital goods and non-petroleum products rose to the highest since April 2015.
However, the much talked about trade deficit with China stood at $34.9 billion, the widest since September 2015. Trade deficit is closely watched by President Trump who has often cited trade deficit as evidence that international trade is not benefiting the U.S. as much as it should. The president promised to shrink trade deficit and formulate policy that put Americans first.
Supporting president position, Jared Bernstein, a senior fellow at Center on Budget and Policy Priorities and a former economic adviser to Vice President Joseph R. Biden said persistent trade deficits reflected a structural problem of fewer goods being produced in the United States and fewer manufacturing jobs.
“You actually have to implement pretty drastic policies to disrupt these flows, which are embedded in the global economy. The things you’ve heard them talking about are pretty marginal,” Mr. Bernstein said. “Cargo ships aren’t going to disappear because of saber rattling.”
According to the Commerce Department, “some of the initial effects” of Hurricane Harvey, which struck the Gulf Coast of Texas late in the month. The impacts from Hurricanes Harvey, Irma and Maria “will likely be reflected in subsequent reports,” the department said in a notice.
Unemployment claims declined 12,000 last week and have now been below the 300,000 threshold for 135 consecutive weeks last week, the longest stretch since 1970.