U.S. Trade Deficit Narrows Sharply In August

The US trade deficit narrowed significantly in August as exports rose and imports declined, indicating that trade could have a minor negative impact on economic growth in the third quarter, Lucia Mutikani reported.

Economists predicted the trade deficit would decrease to $70.6 billion, down from the previously reported $78.8 billion in July.

The trade gap shrank by 10.8% to $70.4 billion, down from a revised $78.9 billion in July, the Commerce Department's Bureau of Economic Analysis (BEA) announced on Tuesday.

Economists surveyed by Reuters had predicted the trade deficit would decrease to $70.6 billion, down from the previously reported $78.8 billion in July.

Trade has detracted from gross domestic product (GDP) for the past two quarters. Current growth estimates for the third quarter suggest an annualized rate as high as 3.2%. The economy expanded at a 3.0% pace in the April-June quarter.