Today's Report (09/05/2021)
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $73.3 billion in August, up $2.9 billion from $70.3 billion in July, revised.
August exports were $213.7 billion, $1.0 billion more than July exports. August imports were $287.0 billion, $4.0 billion more than July imports.
The August increase in the goods and services deficit reflected an increase in the goods deficit of $1.6 billion to $89.4 billion and a decrease in the services surplus of $1.4 billion to $16.2 billion.
Year-to-date, the goods and services deficit increased $140.8 billion, or 33.7 percent, from the same period in 2020. Exports increased by $244.3 billion or 17.5 percent. Imports increased by $385.1 billion or 21.2 percent.
What Is It?
A monthly report on US exports and imports of goods and services. The US trade balance is the difference between the US's exports and the value of its imports for a given period.
What Are The Fundamental Effects?
This data will be incorporated by the Bureau of Economic Analysis into the advance GDP estimates, this data can help reduce the size of revisions to the GDP growth in the second estimates.
How Does It Affect The Markets?
DOLLAR - An improvement on the Trade Balance is typically viewed as favourably to the dollar. The more goods and services foreigners buy from the US the more dollar they’ll need to pay for American products. However, flooding the market with even more dollar could weaken the dollar.
STOCKS - If the export growth is strong enough to heighten fears of inflation, it could displease stock investors because the interest rates could edge higher. However, typically stocks fare well in improved trade balance because it means that there is an increase in oversea sales.
BONDS - Don’t just look at the headline figures but focus on what’s going on behind the scenes, if the trade balance improves bond investors prefer the reason to be a fall in imports rather than the exports. If the deficit climbs, traders might hope the cause is a plunge in exports, which would at least ease economic output.