The US trade deficit narrowed more than anticipated in August, driven by a decrease in goods imports amid higher tariffs. According to the Commerce Department’s Bureau of Economic Analysis and Census Bureau, the trade gap contracted by 23.8 per cent to $US59.6 billion. Economists had predicted a smaller decrease, forecasting the deficit to be around $US61.0 billion.
The report’s release was delayed due to the recent government shutdown. The data indicates a potential boost to the economy in the third quarter if this trend continues. However, the details within the report suggest a more complex picture. Imports saw a significant decline, falling by 5.1 per cent to $US340.4 billion overall.
Goods imports specifically tumbled by 6.6 per cent to $US264.6 billion, with a notable $US11.3 billion decrease in industrial supplies and materials, primarily due to a $US9.3 billion drop in non-monetary gold. Additionally, imports of consumer goods fell by $US3.7 billion, reaching their lowest level since July 2020.
This decline in consumer and capital goods imports, including items like computer accessories and telecom equipment, could signal a slowdown in both consumer and business spending during the last quarter. Significant declines were noted in jewellery and pharmaceutical preparations.
