Amid the unfolding of tariff effects, exports are moving in the wrong
direction and look to be a big negative for third-quarter GDP. The
nation's trade deficit in goods was a whopping $75.8 billion in August
with exports down 1.6 percent for a second straight month. Imports are
also a negative for the trade balance, up 0.7 percent following a 0.9
price rise in July.
Exports of agricultural products plunged 9.5
percent in August to $11.9 billion which is on top of a 6.3 percent
monthly drop in July. Exports of industrial supplies were also very
weak, down 5.9 percent to $43.8 billion, while exports of vehicles fell
2.8 percent to $12.7 billion. These offset a really good showing for
consumer goods which rose 10.3 percent to $17.6 billion. Capital goods,
which are the nation's strongest exports, rose 0.3 percent to $46.5
billion.
The import side shows a 3.2 percent rise in vehicles to
$31.7 billion with consumer goods, which is the nation's sore point for
trade, up 1.3 percent to $53.3 billion. Imports of capital goods fell
0.9 percent to $57.6 billion which is a positive for the balance but a
negative for business investment. Imports of agricultural products fell
1.2 percent to $12.3 billion.
The monthly goods deficit has been
larger but not by much, eclipsed only by $76.0 billion in February this
year. The monthly average so far in the third quarter is $74.0 billion
vs $67.6 billion in the second quarter -- this points to a major drag
for net exports in the GDP report, one offset however by a strong build
underway for inventories in other data released this morning. Country
balances aren't posted with the advance report but will follow with next
week's international trade report that will also include services.
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