WASHINGTON: The US trade gap declined for a fifth straight month in August as imports, including oil, fell further, according to official data released Wednesday.

Exports edged down as well on decreases in industrial supplies and materials, the Commerce Department said.

The overall trade deficit dropped $3.1 billion to $67.4 billion in August, the data showed, slightly more than expected.

In recent months, companies have rushed to replenish depleted inventories to meet strong demand from US consumers.

But soaring inflation has raised concerns that shoppers will pull back, causing firms to become more cautious.

The Federal Reserve has been raising interest rates aggressively to dampen demand and cool inflation, and many families have to spend a greater share of their incomes on staple goods.

1Q trade deficit declines 21.42pc to $9.2bn YoY

US goods and services imports fell by $3.7 billion to $326.3 billion in August, a decline fueled by a $2.7 billion drop in crude oil imports amid falling global energy prices.

Exports dropped $700 million in August, with a dip seen in shipments of automotive vehicles, parts, and engines, as well as a slight decrease in travel.

The US deficit with China stood at $33.5 billion, up slightly from July, and the highest since November 2018.

“The data reported so far for (the third quarter) suggest trade will once again contribute positively to GDP,” Rubeela Farooqi of High Frequency Economics said in an analysis.

But she cautioned that “weaker global growth prospects suggest trade flows will slow,” as a strong dollar and softer foreign demand weigh on exports.

Higher interest rates have strengthened the US dollar, making American goods relatively more expensive, which could trim exports, but so far the data are likely to boost growth in the world’s largest economy.