U.S. trade gap aided by lower imports

The government announced this morning that that total August exports of
$128.2 billion and imports of $158.9 billion resulted in a trade deficit of $30.7 billion, down from $31.9 billion in July.  Analysts surveyed by Bloomberg had anticipated a gap of $33.0 billion.

In addition to a small dip in imports, the nation’s balance of payments was also aided by a minor increase in exports as the global economy continues to display small improvements.

As the chart from the Commerce Department reveals, the U.S. trade deficit has improve dramatically during the recession because companies no longer need to import as many goods amid falling demand.  In addition, oil prices are down roughly 50% from a year ago, which has also dented the deficit.

Of course, sagging demand has also reduced world demand for U.S. goods and services.  As the U.S. economy begins to recover, however, the best news on the trade deficit appears to be behind us.