WASHINGTON – The US posted its largest monthly trade deficit since August 2006 as imports of consumer goods previously recovered from epidemic levels in August, adding evidence of a return to global trade.
The Commerce Department said on Tuesday that the US trade deficit widened by $ 5.9% to $ 67.1 billion since July, the largest gap since August 2006. Imports rose 3.2% to $ 239 billion in August, while exports rose 2.2% to $ 171.9 billion, compared to exports of services and manufacturing products.
Imports of consumer goods and food items increased in August and are the only broad categories of foreign trade that have surpassed year-earlier levels, Tuesday’s data shows. This possibility reflects fiscal support of the federal government of about $ 1 trillion through increased unemployment insurance, incentive checks and tax cuts since March.
While those programs have mostly run their course – an additional $ 600 weekly unemployment benefit expires in July – consumer spending continued to rise through August. The result has been greater imports of furniture, clothing and pharmaceuticals.
Businesses from other regions present a mixed picture of data recovery.
Industrial supply imports fell from August in July and imports of capital goods and vehicles slowed, suggesting renewed caution by domestic businesses after the economy’s initial rebound from a coronovirus-related shutdown.
Total exports remained 13% below their levels in August 2019, as the slowdown in the global economy weighed sales of US goods and industrial supplies to other countries.
The overall trade deficit is outpaced by a long trade surplus decline in US services, which fell to $ 16.8 billion in August 2019 – its lowest level in nine years – from $ 23.8 billion.
While there were indications that the US was dominant in services prior to the epidemic, much of the recent decline has been in recent months due to the impact Kovid-19 has had on international tourism. So-called travel exports, which represent spending by foreigners in the US, were down 77% in August from $ 3.62 billion a year earlier.
Write Paul Kieren at [email protected]
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