August US trade deficit up

The US Department of Commerce announced yesterday that the US trade deficit for August was US$59.0 billion, up from a revised US$58.0 billion in July. August exports hit a record $108.2 billion, US$1.8 billion more than July exports of US$106.4 billion. Imports also hit a record US$167.2 billion, US$2.9 billion more than July imports of US$164.3 billion.

Brad Setser analyses the trade data and concludes that relative prices do matter.

Falls in the dollar work with a lag, and US exports...are benefiting from the weak dollar at the end of last year... The other story continues to be the absence of any growth in non-oil imports. That too may reflect the lagged impact of dollar weakness.

This chart would suggest so, although other factors are obviously also at play.