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US August Trade Deficit Widened, Wholesale And Retail Inventories Grew Strongly
- Sep 29, 2018 -

After four consecutive months of strong growth, new orders for major capital goods manufactured in the US fell back in August, while shipments barely increased, but this may not change the equipment for the third quarter. Expectations of steady growth in spending.


According to Reuters reported on September 27, other data released on the 27th showed that the trade deficit of goods last month increased sharply due to the decrease in exports and the increase in imports. But strong growth in wholesale and retail inventories should help offset the drag on trade that is expected to be in the third quarter.


The US Commerce Department said orders for non-defense capital goods, excluding aircraft, fell 0.5% last month as demand for computers, electronics and motor vehicles declined.


According to reports, the so-called core capital goods orders increased by 1.5% in July. Economists surveyed by Reuters have predicted that orders for these commodities will increase by 0.4% in August, and orders for core capital goods will increase by 7.4%.


According to the report, shipments of core capital goods increased slightly by 0.1% in August, following a 1.1% increase in July. In the government's GDP measurement, core capital goods shipments are used to calculate equipment expenses.


According to the report, corporate confidence is currently at its highest level for many years, which is partly driven by the $1.5 trillion tax cut. In this context, the unexpected fall in core capital goods orders in August may be temporary. However, there are concerns that the escalating US-China trade war may affect confidence and undermine consumer and corporate spending.


The report said that the Fed announced on the 26th this year the third rate hike. Federal Reserve Chairman Jerome Powell told reporters that this is "a particularly bright moment" for the economy.


According to the report, the exchange rate of the US dollar against a basket of currencies has risen, and the yield of US Treasury bonds has not changed much.


In the second report released on the 27th, the Ministry of Commerce confirmed that the annual growth rate of the US economy in the second quarter was 4.2%. This is the fastest growth rate in the past four years, almost double the growth rate in the first quarter (2.2%).


The expected growth rate in the third quarter is higher than 3%. The third report of the Ministry of Commerce showed that the trade deficit in August increased by 3.8 billion US dollars to reach 75.8 billion US dollars.


According to reports, exports of food, feed and beverages fell by 9.5%, and merchandise exports fell by 1.6% to $137.9 billion. Industrial goods and motor vehicle exports also declined last month.


Driven by the import of motor vehicles, consumer goods and other commodities, the import of goods in August increased by 0.7% to reach 213.7 billion US dollars.