National Bank of Poland likely to stand pat in October, inflation to remain above 2.5 pct target until end-2020
U.S. goods trade deficit widens further in August, imports growth surpasses exports growth
The U.S. goods trade deficit widened further in August, with growth in imports surpassing exports. The trade deficit widened USD 3.6 billion to USD 82.9 billion in August, exceeding July’s record USD 79.3 billion. The deficit in August was slightly wider than consensus expectations of a deficit of USD 81.8 billion. August’s widening was mainly due to goods imports, which rose 3.6 percent sequentially. Meanwhile, exports grew 2.9 percent in August, following a double-digit rise of 12.1 percent in July.
Today’s data is consistent with the outlook that slower growth in activity is expected in months and quarters ahead as the fortunes of the domestic economy become more dependent on the service sector – where rebound is expected to be slower and more dependent on the trajectory of COVID-19 infections, said Barclays in a research report. However, there are possible upside risks in the near term from recent data on inventory accumulation, which rose today as businesses worked to replenish stockpiles depleted by sharp rise in consumer goods demand in earlier months.
The slowdown of imports shows further normalization in a number of categories, including capital goods and autos. July’s acceleration in imports was mainly driven by sharp rises in the capital goods and industrial supplies categories. Both categories came back to earth in August, with capital goods imports rising only 1.5 percent sequentially and industrial supplies falling 3.2 percent.
The deceleration of exports also shoes normalization of automobile trade and production. Exports of automobile rose only 0.6 percent in August after a cumulative rise of 252.6 percent in prior two months following May’s low. This pattern evidently reflects domestic auto production, which has also snapped back rapidly after having decelerated to a trickle in the shutdown. Exports of capital goods dropped 4.3 percent in August after a cumulative rise of 20.1 percent in the prior two months. Consumer goods’ exports rose only 1 percent in August.