August 2017 International Trade
Submitted by Atlas Indicators Investment Advisors on October 10th, 2017America’s trade imbalance improved in August 2017 according to the most recent data from the Bureau of Economic Analysis. Following July’s upwardly revised trade deficit of $43.6 billion (originally $43.7 billion), our nation’s shortfall improved to minus $42.4 billion. This narrowing was a result of increased exports and falling imports. More specifically, August’s improvement reflected a decrease in the goods deficit and an increase in the services surplus.
Gains in exports for the largest goods category (capital goods) as well as consumer wares led the advance. Automotive trade helped as well. However, these were partially offset by declining exports of industrial supplies and food, feeds, & beverages. Imports of goods were mixed as well. American firms imported less plant equipment and industrial materials. However, consumers increased their purchases of foreign-made wares, imported autos rose, as did the food, feeds, & beverages category.
Service export growth was nearly ubiquitous as seven of the nine major categories improved. Maintenance and repair rose as did insurance and financial services. Computer services were higher as well, and transportation exports improved. In total, the services surplus widened 1.4 percent to $22.0 billion.
It is virtually impossible for the BEA to isolate the effects that Hurricane Harvey had on international trade late in the month. Nonetheless, subsequent reports will have weather issues imbedded in the data, so future releases will become more challenging to interpret. It may be several months before trade activity stabilizes as the hurricane affected areas attempt to normalize their activities.