Notch another encouraging data point for the U.S. economy. The nation's trade deficit fell to $30.7 billion in August, driven lower by a large decline in imported oil purchases, the U.S. Commerce Department announced Friday.
Economists surveyed by Bloomberg News had expected the trade deficit to total $33.0 billion in August. The trade deficit totaled a revised $31.9 billion in July and $27.5 billion in June. In the first eight months of 2009, real (inflation adjusted) exports have plummeted 18.2 percent, but real imports have plunged more, 19.6 percent.
In August, imports fell by $913 million or by 0.6 percent to $158.9 billion, aided by a $1.28 billion decline in the nation's imported oil bill. Exports increased $228 million or by 0.2 percent to $128.2 billion: it was the highest export total since December 2008.
Amid the financial crisis and pronounced recession, the nation's trade deficit has declined for about one year.
In August, the price of imported oil increased $2.27 to $64.75 per barrel, it's highest level since November 2008. However, the volume of oil imported declined to 8.7 million barrels per day in August from 9.6 million in July.
The pronounced recession that has created so much havoc has led to one long-term benefit for the U.S. economy: a decreasing trade deficit, which results in less loss of U.S. wealth to foreign sources. The biggest factor in this is the 'frugal consumer' trend: after a decade of over-consumption, Americans have tightened their belts and increased their rate of savings to rebuild nest eggs hit hard by the stock market and housing sector slumps.
The declining trade deficit has also received an assist from exports, which have strengthened recently, aided by a weaker dollar, which makes U.S. products less expensive for foreign buyers.
In August, the U.S. registered export gains in autos, metals, and soybeans, among other categories. Exports of services increased 0.5 percent to $41.4 billion, while exports of goods were unchanged at $86.8 billion.
Meanwhile, August imports of services declined 0.3 percent to $30.2 billion and imports of goods decreased 0.6 percent to $128.7 billion.
Analysis: Another modestly constructive data point for the U.S. economy, as the nation's imported oil use continues to decline, driven lower by the smaller American workforce and by economizing. Further, exports continue to show incremental improvement, no small accomplishment given the global recession. The export gain partly reflects the impact of the weaker dollar, and it bodes well for higher export totals as the global economic recovery gains steam.
U.S. trade deficit narrows in August on oil import drop