Wed. Jul 17th, 2024

US trade deficit at lowest since 2020

By nr39r Mar23,2024

Located in Washington, The trade deficit of the United States of America reached its lowest level since the year 2020, when COVID-19 had an impact on international trade.

However, in 2023, the country exported an unprecedented amount of products and services, which contributed to the deficit’s decline.

In 2023, the balance between exports and imports was lowered by 18.7% compared to 2022, reaching 773.4 billion US dollars (B), as indicated by data that was issued by the Department of Commerce on Wednesday.

The deficit, on the other hand, climbed by 0.5% for the month of December alone, reaching $62.2 billion, when analysts were anticipating $62 billion, as stated by the consensus of

As a result of a decrease in the value of imported commodities and a rise in the surplus of services, the United States’ trade deficit shrunk to its lowest level since 2009 in the previous year.

According to figures released by the Commerce Department on Wednesday, the annual trade deficit decreased by over 19%, reaching $773.4 billion, from a record recorded in 2022.

For the month of December, the deficit in goods and services trade reached $62.2 billion, which is a modest increase over the previous month’s figure. The numbers have not been changed to account for inflation.

On October 5th, Washington, DC (Reuters) – Due to the fact that exports climbed significantly in August, the trade deficit in the United States shrunk more than was anticipated. This indicates that trade is likely to be able to sustain economic growth in the third quarter.

A statement released by the Commerce Department on Thursday revealed that the trade deficit decreased by 9.9% to reach $58.3 billion, marking the lowest amount since September 2020.

It was earlier stated that the trade deficit was $65.0 billion, but the data for July was amended to indicate that it had increased to $64.7 billion instead. A survey conducted by Reuters interviewed economists, and they predicted that the trade deficit would decrease to $62.3 billion in August.

A 1.6% increase brought the total value of goods and services exported to $256.0 billion. Exports of products increased by 1.8% to reach $171.5 billion, with shipments of capital goods reaching a total that had never been seen before.

Exports of meals, feeds, and drinks, on the other hand, reached their lowest level since August of 2020. Service exports reached an all-time high of $84.5 billion, making them the largest on record.

At $314.3 billion, the total value of goods and services imported declined by 0.7%. Imports of goods fell by 0.9% to a total of $256.0 billion, which may indicate a decline in domestic demand in conjunction with increased desire for borrowing money.

With a surplus of $26.2 billion, the services sector registered its highest level since March of 2018. During the second quarter, the economy experienced an annualized growth rate of 2.1%, however trade did not contribute to this expansion.

The data that was issued by the Commerce Department on Thursday indicated that the United States trade deficit decreased to 58.3 billion dollars in August, marking its lowest level since the latter half of the year 2020.

When compared to the corrected figure for July, which was $64.7 billion, this implies a decline of roughly 10%. After predicting that the trade deficit would decrease to $62.3 billion, economists were surprised by the decline, which exceeded their predictions.

Rubeela Farooqi, an economist with High Frequency Economics, told AFP that there has been a general slowdown in the flow of trade.

She went on to say that since the beginning of the quarter, exports have increased while imports have decreased, which indicates that domestic demand has slowed down.

In the month of August, the total value of exports increased by $4.1 billion, reaching $256 billion. Specifically, the value of goods exports increased by 1.8%, reaching $171.5 billion.

The amount of capital goods that were shipped reached an all-time high, while the amount of food, feed, and beverage exports reached their lowest level since August of 2020. Service exports reached an all-time high of $84.5 billion, making them the largest on record.

On the other hand, imports decreased by $2.3 billion, reaching $314.3 billion, with goods imports falling by 0.9% to reach $256.0 billion.

This decrease in imports may be an indication of a weakening in domestic demand, which has been attributed to the Federal Reserve’s decision to raise interest rates significantly in an effort to reduce inflation and bring about a cooling of demand.

A surplus of $26.2 billion was recorded for services, marking the largest level since March of 2018. Despite the fact that the trade gap is getting smaller, trade did not contribute in any way to the 2.1% annualized growth rate that the economy experienced in the second quarter.

As a result of a decrease in imports from China that was greater than a decrease in exports to China, the goods deficit with China decreased by $1.3 billion to $22.7 billion in the month of August.

This comes in the midst of concerns that global growth is slowing down, notably among the major trading partners of the United States, which may have an effect on exports.

At the same time, Farooqi cautioned that there is a possibility that growth would slow down later on in this year if the employment market cools “more materially,” which would have a negative impact on the demand for goods and services. The data reveals that although consumer spending has been a key driver in growing US commerce, analysts warn that this could diminish as a result of the interest rate hikes that the central bank has implemented over the course of the past year.


By nr39r

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