U.S. International Trade (Exports + Imports) Reaches 22-Month High of $354 Billion in Aug.
Today the BEA released its closely-watched report on “U.S. International Trade in Goods and Services." In August there was $153.9 billion of international selling activity (U.S. firms selling their output to other countries, or exports) and $200.2 billion of international buying activity (U.S. firms and consumers purchasing products from other countries, or imports). Then what the BEA does (and this is what gets reported widely by the media) is to subtract imports from exports, to arrive at the monthly “trade deficit,” which was -$46.3 billion in August, up from $42.6 billion July. As usually happens, any increase in the U.S. trade deficit will get reported as a negative event, here's an example today from CNNMoney:
"The U.S. trade deficit ballooned to $46.3 billion in August, according to a government report released Thursday.The trade balance -- which measures the difference between the nation's imports over exports -- came in higher than estimates. The trade gap widened from $42.6 billion in July. An imbalance between exports and imports can drag down economic growth in the U.S and also lead to more job losses in the manufacturing sector."
It's probably a good thing that the government doesn't also report detailed trade statistics among U.S. states, because there would likely be dozens of state "trade gaps" each month between individual states, and I guess that would "drag economic growth in the U.S." just like our "trade gaps" with China or Canada supposedly "drag economic growth in the U.S.?"
As I reported back in August: Given the importance of all international transactions to the U.S. economy, why not consider a measure of international trade that would compute the total amount of international trading activity in a given month by ADDING exports to imports (see the chart above for total monthly trade), instead of netting out these two amounts to calculate the “trade deficit”?