The U.S. trade deficit widened more than expected in August thanks in part to a record level of imports of consumer goods and as a fresh round of tariffs loom against China and the European Union.
The imbalance stood at $54.9 billion at the end of the month, more than the $54.5 billion projected by economists surveyed by Dow Jones and up from $54 billion in July.
Imports rose to $262.8 billion against estimates of $261.4 billion, while exports increased to $207.9 billion, which also beat expectations of $207.4 billion.
Consumer goods imports hit $57.2 billion, a reflection of increased demand as a healthy shopping appetite helps keep the U.S. economy afloat amid fears of a slowdown.
Even as the overall deficit rose, the gap with China declined sharply, falling 3.1% for the month. On a year-over-year basis, the shortfall with China is $231.6 billion, an 11.4% decline from the same period in 2018.
The deficit with Germany swelled to $7.1 billion, the highest on record thanks to $12.1 billion of imports, also a record.
With additional tariffs about to take effect against the EU, the trade gap also closed across much the region.
The EU deficit fell 23.7% from August though it is up 8.1% from a year ago. The U.S. also is threatening to add duties against the $300 billion of Chinese goods not already subject to tariffs.
On a goods basis, auto exports grew $14.3 billion and hit their highest level since July 2014. The petroleum deficit of $300 million was the lowest on record.
Exports of capital goods, though, hit $44.3 billion, the lowest since October 2017.