Home / Business / The global outlook brightens as US consumer imports reach pre-pandemic levels

The global outlook brightens as US consumer imports reach pre-pandemic levels

WASHINGTON – The United States recorded its largest monthly trade deficit since 2006 in August, when imports of consumer goods returned to pre-pandemic levels, adding evidence of a recovery in global trade.

The US trade deficit increased 5.9 percent from July to $ 67.1 billion, the largest gap since August 2006, the Commerce Department said Tuesday. Imports rose 3.2% to $ 239 billion in August, while exports rose 2.2% to $ 171.9 billion due to stalled exports of manufacturing services and products.

Economists interviewed by the Wall Street Journal had predicted a trade gap of $ 66.2 billion.

Imports of consumer goods and food products rose in August and are the only major foreign trade categories to have surpassed levels from a year ago, according to data on Tuesday. This likely reflects the roughly $ 1

trillion fiscal support that the federal government has pumped into U.S. households through increased unemployment insurance, stimulus checks, and tax cuts since March.

Although these programs mostly ran out of course – the additional $ 600 weekly unemployment benefits expired in July – consumer spending continued to rise through August. The result has been an increase in imports of furniture, clothing and pharmaceuticals.

Trade data from other sectors paint a mixed picture of the recovery.

Imports of industrial supplies have declined in August since July and imports of capital goods and vehicles have slowed, suggesting renewed caution on the part of domestic firms following the initial recovery of the economy from coronavirus-related closures.

Overall exports remained 13% below their level in August 2019, as slowing momentum in the global economy weighed on US sales of capital goods and industrial supplies to other countries.

The overall trade deficit was further exacerbated by a decline in the longstanding U.S. trade surplus in services, which fell to $ 16.8 billion, the lowest in nine years, from $ 23.8 billion in August 2019.

While there were signs that U.S. dominance in services was waning ahead of the pandemic, much of the most recent decline stems from Covid-19’s impact on international tourism, which has plummeted in recent months. So-called travel exports, which represent the spending of foreigners in the United States, fell by 77% in August from the previous year to $ 3.62 billion.

Write to Paul Kiernan at paul.kiernan@wsj.com

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