US Trade Deficit Grows on Weak Exports

The U.S. trade deficit widened slightly in August as exports slipped, suggesting trade will probably not be much of a boost to growth in the third quarter.

The Commerce Department said on Thursday the trade gap nudged up 0.4 percent to $38.8 billion. July’s shortfall on the trade balance was revised to $38.6 billion from the previously reported $39.15 billion.

Economists polled by Reuters had expected the trade deficit to edge up to $39.5 billion in August.

The report was originally scheduled for release on October 8 but was delayed after the federal government was partially shut down because of a fight over the government budget and raising the debt ceiling. The 16-day shutdown ended last Wednesday.

When adjusted for inflation, the trade gap was little changed at 47.3 billion from July. This measure goes into the calculation of gross domestic product.

Trade made no contribution to GDP growth in the second quarter and will likely offer only a modest lift to third-quarter output.

The economy grew at a 2.5 percent annual rate in the April-June quarter, stepping up from the first-quarter’s 1.1 percent pace. Third-quarter growth estimates are currently around 2 percent.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza