Key facts
- The US trade deficit widened 13.7% to $105.6 billion in August.
- Economists had forecast a deficit of $102.0 billion.
- Imports increased 4.3% to $420.8 billion, driven by a 5.3% rise in goods imports.
- Exports rose 1.4% to $315.2 billion, with goods exports up 2.2%.
- Trade has subtracted from GDP for three consecutive quarters.
- Trade may cut as much as 2.5 percentage points from third-quarter GDP.
The US trade deficit unexpectedly widened in August, reaching $105.6 billion, a 13.7% increase from the previous month, according to data from the Commerce Department's Bureau of Economic Analysis and Census Bureau. This figure surpassed the $102.0 billion deficit forecast by economists polled by Reuters.
The widening deficit was largely attributed to a surge in imports, particularly of goods, which rose 5.3% to $342.2 billion, contributing to a total import increase of 4.3% to $420.8 billion. This surge in imports occurred despite President Donald Trump's tariffs, which he intended to reduce the trade deficit.
Exports saw a more modest increase of 1.4% to $315.2 billion, with goods exports growing by 2.2% to $205.7 billion. The persistent reliance on imports to meet robust domestic demand, which has shown strength in consumer spending and business investment related to AI, suggests that trade will likely continue to be a drag on economic growth. Trade has already subtracted from gross domestic product for the past three consecutive quarters, and economists estimate it could reduce third-quarter GDP by as much as 2.5 percentage points.