An ailing global economy is strengthening the US Dollar and hurting the competitiveness of US manufacturers and growers.
The data released on Tuesday by the Commerce Department reinforces that the U.S. economy is vulnerable to a strong dollar compounded by a weak demand for US goods by global markets. Overall exports fell two percent to their lowest level since October 2012.
According to the new data, the trade deficit swelled by 15.6 percent to $48.3 billion in August (adjusted for seasonal factors).
Exports to Mexico fell by $1.5 billion in August and the European Union bought $500 million less from America than it did in July, according to data on bilateral trade which is not seasonally adjusted.
This data will no doubt prolong the decision to raise the interest rate by the Federal Reserve in the next meeting next month.
Consumer prices in the world’s largest economy also recorded their biggest drop in eight months in September as gasoline prices slumped. Also last month, U.S. producer prices logged their biggest fall in eight years.