(What's Left of) Our Economy. trade, Census Bureau, China, exports, high tech goods trade, imports, Made in Washington trade deficit, manufacturing, non-oil goods trade deficit, oil, recovery, services, trade deficit
America’s goods and services trade deficit rebounded by just under 3 percent sequentially in August, from an upwardly adjusted $39.55 billion to $40.73 billion. Fueling this increase in part was a new record monthly total for the longstanding U.S. manufacturing trade deficit – to $80.43 billion. Another monthly record set in August came in services imports – where the $42.99 billion in purchases from abroad represented the sector’s second straight monthly high.
The massive, manufacturing-dominated U.S goods deficit with China increased by double digits on month in August, to the highest level ($33.85 billion) since last September. In a related development, the volatile American global high tech goods deficit surged by 51 percent sequentially to its highest level ($10.23 billion) since last November ($11.41 billion). The oil trade gap rose strongly as well, to its greatest total ($5.39 billion) since last December ($5.65 billion).
Total goods and services exports and imports rose modestly on month in August, and hit their highest levels since July, 2015. But both are down from last year’s levels, as is the combined trade deficit. Yet the shortfall in trade heavily influenced by American agreements and related policy decisions remained a major (nearly $439 billion) drag on inflation-adjusted recovery-era growth.
Here are selected highlights of the latest monthly (August) trade balance figures released this morning by the Census Bureau:
>The U.S. goods and services trade deficit rose in August by 2.98 percent, from an upwardly adjusted $39.55 billion in July to $40.73 billion.
> One leading contributor to the higher total – a record monthly trade shortfall of $80.43 billion in manufacturing, which topped the previous (October, 2015) all-time high of $76.74 billion by 4.81 percent and the July level of $74.83 billion by 7.48 percent.
>The manufacturing deficit so far ($561.26 billion) is running 3.42 percent ahead of last year’s record pace ($542.7 billion from January through August).
>Manufacturing exports year-to-date are 7.08 percent lower than in 2015, while imports are off by just 2.67 percent.
>The August trade deficit was also boosted by the highest monthly services import total on record ($42.99 billion) – which helped cut the month’s services surplus to it lowest level ($19.56 billion) since December, 2013 ($19.33 billion).
>The August services import total topped the old record of $41.48 billion (set in July) by 3.64 percent.
>Also lying behind that record August manufacturing trade deficit: a whopping 51 percent monthly jump in the volatile high tech goods deficit – from $6.77 billion to $10.23 billion. That total represented the highest since last November ($11.41 billion).
>High tech goods exports dipped by 0.93 percent sequentially in August (from $28 billion to $27.74 billion), but imports rose by 9.19 percent (from $34.77 billion to $37.97 billion).
>Nor was the historically bad August manufacturing trade performance helped by a double-digit (11.61 percent) sequential increase in the manufacturing-dominated merchandise deficit with China. At $33.85 billion, the latest monthly total was the greatest since last September’s record $36.30 billion.
>Nonetheless, the China goods deficit is down 5.69 percent in 2016 on a year-to-date basis.
>August also saw America’s current-dollar oil trade deficit rise by near-double digits on month (8.38 percent), from $4.97 billion in July to $5.39 billion. That’s the highest monthly oil deficit since last December’s $5.65 billion – though on a year-to-date basis, the shortfall remains down nearly 50 percent.
>Combined goods and services exports rose by 0.79 percent sequentially in August, from an upwardly revised $186.38 billion to $187.85 billion. That’s the highest monthly total since July, 2015’s $190.11 billion.
>Total imports were up as well on month – by 1.17 percent, from an upwardly revised $225.93 billion to $228.58 billion. That August figure is also the highest since July, 2015 ($230.01 billion).
>But both total exports and imports are off 2015’s year-to-date levels – the former by 4.10 percent and the latter by 3.60 percent.
>As a result, the combined goods and services trade deficit is currently 1.30 percent lower ($330.74 billion) than in the first eight months of 2015 ($335.08 billion).
>Unfortunately, trade remains a major drag on the current, historically feeble U.S. economic recovery. Separate figures from the Commerce Department’s Bureau of Economic Analysis reveal that it has cut cumulative real growth since the current expansion began (in mid-2009) by 8.63 percent, or $192.2 billion.
>The trade toll taken by the Made in Washington portion of the trade deficit (the real non-oil goods total) is much higher – 19.70 percent, or just under $439 billion.