The U.S. August trade deficit rise to $40.7 B
The U.S. August trade deficit rise to $40.7 B trimmed the July drop to $39.6 (was $39.5) B from the $44.7 B 4-month high in June, leaving a trade gap that was $1.4 B wider than indicated by the "advance" trade report thanks to a bigger boost to August service imports from the Brazilian Olympics than analysts had assumed. The revisions trimmed Q3 GDP growth prospects, but analysts will keep our estimate at 2.5%, with with a $25 (was $29) B Q3 net export contribution after a $7.8 B addition in Q2. Analysts expect an 9% (was 8%) Q3 growth rate for exports after a 1.8% clip in Q2, and a 3% (was 2%) Q3 growth rate for imports after a 0.2% Q2 pace. Analysts expect the current account deficit to narrow to $118.3 B in Q3 from $119.9 B in Q2, while the annual gap should rise to an expansion-high $496 B in 2016 from $463 B in 2015 and $390 B in 2014. Analysts've seen a big U.S. Q2-Q3 trade bounce led by exports alongside a dollar downswing and an oil price rise, following winter weakness for exports and imports with "real" trade declines and price drops that can be attributed to a strong dollar and a weak global economy.