Trade Deficit Widens By 8.7 Percent; Imports Grow Faster Than Exports

In August, the trade deficit widened considerably, increasing 8.7 percent to a monthly pace of $46.3 billion. The increase in the trade gap comes after a large drop in July of 14.5 percent. Though volatile in recent months, the trade deficit began to accelerate following the Greek debt crisis last spring, which put a damper on exports. This drop in net-exports was a major drag on Q2 GDP growth. Though Q3 will likely not see a large drag on growth from net-exports, it will likely not be an area of strength either.

Over the month, exports grew 0.3 percent. At the same time, imports rose 2.1 percent, following an equally sized drop in July. From a year prior, exports were up 18.6 percent, while imports were up 25.0 percent.