The US trade deficit shrank to $58.3 billion in August from $64.7 billion in July, as reported by the US Bureau of Economic Analysis (BEA). This marks the lowest trade deficit since September 2020.
In August, exports totalled $256 billion, an increase of $4.1 billion from July, with notable growth seen in fuel, pharmaceuticals, chips, and financial services. However, there was a decline in the export of cars, trucks, and buses.
US imports in August amounted to $314.3 billion, which is $2.3 billion less than in July. Imports of mobile phones, semiconductors, and electrical devices experienced the most significant declines, while there was an increase in the import of crude oil and transportation and travel services.
The US trade deficit with China decreased by $1.3 billion, reaching $22.7 billion, marking the lowest deficit in recent months.
US Trade Deficit Narrows as Imports Fall
The US trade deficit contracted in May as the value of imported goods reached its lowest level since October 2021.
The deficit in goods and services trade decreased by $5.5 billion, a 7.3% decline compared to the previous month, totalling $69 billion, according to data from the Department of Commerce, as reported by Bloomberg.
The figures are not adjusted for inflation, and the resulting discrepancy matched economists’ median estimate in a Bloomberg survey.
The value of goods and services imports dropped by 2.3%, driven by declines in consumer goods and industrial stocks. Total exports fell by 0.8% due to decreased shipments of food and animal feed, such as soybeans.
The reduced demand for foreign goods suggests that American consumers are shifting their preferences from goods to services. The decline in inbound shipments indicates that US firms are aligning their inventories with sales.