The U.S. trade deficit narrowed in August, reflecting an increase in exports and a downtick in imports as Hurricane Harvey disrupted shipping along the Gulf Coast.
Improving global demand and a weaker dollar are helping boost USA exports, with the trade deficit narrowing to an 11-month low in August, Commerce Department data showed Thursday.
Overall, U.S. exporters are benefiting recently from an improving global economy and a weaker dollar, which makes American products less expensive overseas.
The drop in consumer goods exports was attributable to a decrease in foreign sales of pharmaceutical and medicinal products, mainly to Italy. The overall trade deficit was up 8.8% compared with the first eight months of 2016. Exports of services declined 0.4% to $66.1 billion. The Bank of Canada, long concerned by sluggish non-energy exports, has raised interest rates twice this year and says further hikes will depend on how the economy develops.
Meanwhile, imports of motor vehicles and parts climbed 2.5 per cent to $9.3 billion, while metal ores and non-metallic minerals rose 9.9 per cent to $1.2 billion.
Imports of goods decreased $0.3 billion to $193.6 billion, the fourth consecutive monthly decrease.
TD Bank economist Dina Ignjatovic said, going forward, a healthy US economy should help to prop up demand for Canadian-made goods, supporting export volumes.
"The outcome of the NAFTA renegotiations also poses some risk, but with negotiations moving slowly, it is unlikely to impact trade this year". As a result, the trade surplus with the United States shrank to C$2.31 billion from C$3.18 billion in July.