US sees unexpected trade deficit increase in August

Imports and Exports | | MIC Customs Solutions |

The US trade deficit unexpectedly widened in August, with imports growing at a faster pace than exports.

The latest US government figures have shown an unexpected increase in the country's trade deficit for August.

Commerce Department data showed the gap grew by three per cent from the prior month to $40.7 billion (€36.38 billion), whereas the median forecast from an earlier Bloomberg survey of economists had been for a deficit of $39.2 billion.

This was because imports jumped by 1.2 per cent during August, outpacing a 0.8 per cent rise in exports for the month. The import surge was mostly generated by the services sector, due to a rise in charges for use of intellectual property coinciding with the Olympic Games.

However, the export rise is expected to be the more significant development in the longer term, as it was driven by less temporary trends such as sales of consumer goods, pharmaceuticals and industrial supplies.

Improvements in global markets and the dissipating effect of the strong dollar are likely to continue to aid US exports and help the American economy to expand further in the coming months.

Sam Coffin, an economist at UBS Securities LLC in New York, said: "The trade deficit looks like it'll provide a pretty big boost to the third quarter. The general story is improving exports."