10.12.2009 Policy Points

August Balance of Trade

The recession continued to affect America’s international trade in August. Once again, the U.S.  imported more goods and services than it exported, according to the most recent report from the Bureau of Economic Analysis.

trade 1The graph (left) shows the changes in American imports and exports that have occurred since the start of the recession in December 2007.

The recession has reduced American demand for foreign goods and services and foreign demand for American goods and services (though the fall in the dollar’s value likely is boosting American exports).

Compared to a year ago (seasonally adjusted), U.S. imports were 29 percent lower while American exports were 21 percent lower.

The rapid decline in imports has helped to reduce the U.S. trade deficit (graph, below). In August, the  U.S. imported $31 billion more than it exported. trade 2When imports of petroleum products are excluded, the trade gaps stood at  a lower $13 billion.

Compared to one year ago (seasonally adjusted), the non-petroleum trade deficit is 44 percent lower and the overall trade deficit is 50 percent lower.

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