Thursday, October 8, 2015

What's Driving the Trade Deficit

The U.S. trade deficit widened to $48.3 billion in August, a 15.6 percent increase from the prior month. Except for one fulky labor-drive reading from this spring, the trade deficit was the largest it's been since March 2012.

U.S. exports of goods and services fell to $185.1 billion, the lowest level since October 2012, and  shipments of goods were the weakest they'd been in more than four years. Industrial supplies – led by big drops in exports of fuel oil, plastics and crude oil – had their worst performance since October 2010. Exports of autos and consumer goods were also down.

On the other side of the ledger, imports climbed in August, benefiting from the stronger dollar. Smart phones were the biggest driver: Imports of cell phones and other household goods totaled $2.1 billion in August, accounting for more than half the $4 billion increase in imports of consumer goods.

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