The U.S. Trade Gap Grew by $3.8 Billion in August

The U.S. trade gap widened in August, according to the Bureau of Economic Analysis. It increased by $3.8 billion or 8.8% to $46.3 billion. That's after the gap shrunk in July by $7.2 billion. So it hasn't grown to match June's 20-month high of $49.8 billion yet, but it's getting close. The widening deficit was mostly caused by imports increasing, since exports also rose slightly.

This is always easiest to see through a chart:

trade 2010-08.png

It's pretty clear that the trade balance has gone more negative since the U.S. recession began to wane in 2009. Although exports began to grow at that time, imports have increased by more.

And that was the story in August. Exports grew by just $339 million, while imports rose by $4.1 billion. Although exports were nearly flat, their small gain resulted in the highest amount of goods and services sold overseas by the U.S. in two years. Imports, however, rose back above $200 billion, which put them very near their 22-month high hit in June.

Really, there's little to celebrate in today's trade report. Exports were virtually flat, while imports continue to soar. That means more of the money Americans are spending is going abroad instead stimulating the U.S. economy. As this trend continues, the nation's recovery will have more trouble gaining momentum.