Trade deficit drops in August

The U.S. trade deficit edged down in August as foreign oil imports retreated from a record high the previous month, a drop that more than offset a setback in exports.

The Commerce Department said Friday that the trade deficit declined by 3.5% in August to $59.1 billion, the smallest imbalance since June.

The deficit is expected to shrink even further in coming months as a severe economic slump in the U.S. depresses demand for oil and other imported goods. But exports also are expected to slow as economic weakness in the U.S. spreads to other countries.

America’s foreign oil bill declined to $43.7 billion in August, down $7.3 billion from the all-time high of $51 billion in July. The drop reflected both lower shipments and lower oil prices.

The big decline in oil cut total imports to $223.9 billion, still the second-highest level on record, down 2.4% from the record high set in July.