The huge widening in the trade deficit in August to $48.3bn, from $41.8 bn in July, demonstrates the extent to which deteriorating global growth and the sharp appreciation in the dollar have impacted US external trade. Net external trade will subtract about 1.0% points from third-quarter GDP growth, which we now estimate was 2.0%. That said, the rise in the deficit also partly reflects a surge in cell phone imports ahead of the iPhone 6s launch, which will be reversed before year-end.
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