Trade gap narrows as exports jump
Government report shows deficit of $30.7 billion in August, lower than expected.
WASHINGTON (Reuters) -- The U.S. trade gap narrowed unexpectedly in August as trade in services pushed exports slightly higher and imports fell by a fractionally larger amount, a U.S. Commerce Department report showed on Friday.
The monthly deficit was $30.7 billion, down 3.6% from a revised estimate of $31.9 billion for July. That reflected a 0.2% increase in exports to the highest since December and a 0.6% decline for imports.
Analysts surveyed before the report had expected imports to get more of a boost from a combination of higher oil prices and U.S. businesses rebuilding their inventories, and increase the August trade gap to around $33 billion.
Markets mostly shrugged off the report, which showed trade hit a plateau in August after partly recovering from a sharp plunge that began in mid-2008.
"This is temporary payback from the strong numbers in July," said Zach Pandl, economist at Nomura Securities International in New York. "The bottom line is that the trade picture from the United States is cloudy right now."
The August trade deficit was nearly half the record $64.9 billion gap in July 2008, before the global financial crisis took a heavy toll on U.S. consumer demand.
A narrower trade gap is positive for calculations of economic growth for the third quarter. However, the slight decline in imports could reinforce concerns about the strength of U.S. economic recovery from a recession that began in December 2007.
"I would interpret a flattening out of the trade deficit showing a broader stability in the economy. If it widens out again, there is a resurgence in domestic demand," said Keith Hembre, chief economist at FAF Advisors in Minneapolis.
Despite the overall import drop, imports from China and Mexico were the highest since November and those from Canada were the highest since December.
Imports of autos and auto parts were also were the highest since late 2008, in a sign of demand generated by the "cash for clunkers" incentive program for autos.
However, the volume of crude oil imports dropped by 9.4% as the average price for imported oil rose for a sixth consecutive month to $64.75 per barrel.
Exports of services, led by an increase in travel and freight and port services, grew slightly in August, while goods exports fell.
Capital goods exports were the lowest since October 2005, reflecting a large drop in civilian aircraft shipments.
Some other categories such as industrial supplies and materials, autos and auto parts and petroleum products posted gains during the month. 
