A container ship sits in Yokohama, Japan last month. The U.S. and Japan have reached an initial trade agreement this week, according to President Donald Trump.

The numbers: The advance trade deficit in goods widened to $72.8 in August, up 0.5% from the prior month, according to the Commerce Department’s advanced estimate released Thursday. That was smaller than the $74 billion estimate of economists polled by MarketWatch. The report is used by the government to better measure GDP.

The government’s advance report on wholesale inventories showed a 0.4% gain in August. Advanced retail inventories were flat as were retail inventories excluding autos.

What happened: Both imports and exports rose in August, but imports rose at a faster pace.

The gain in exports was led by vehicles and industrial supplies, which includes oil. This offset a drop in the capital goods component.

At the same time, the gain in imports were led by consumer goods. Imports may have risen slightly after President Donald Trump announced on Aug. 1 that the U.S. would slap 10% tariffs on $300 billion of Chinese goods starting at the beginning of September.

The advance indicators are part of a flurry of data Thursday that could alter economists expectations of third quarter GDP growth. Prior to the data, economists projected that GDP would expand at a 2.1% annual rate in the third quarter, almost at the same pace as the 2% rate in the April-June quarter.

The recent trend shows the goods deficit has not been surging.

What are they saying? “The data suggest a slight drag on third-quarter GDP from net exports after allowing for price changes,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

Big picture: The trade deficit doesn’t capture the fact that world trade volumes are falling thanks to the trade war with China and China’s cyclical slowdown, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. This will ultimately slow U.S. export growth.

“Accordingly, we have to expect net trade to be a drag on GDP growth through the year-end and into 2020,” Shepherdson said in a note to clients.

Market reaction: Stocks

DJIA, -0.24%

 opened lower Thursday on signs that the U.S. and China may try to ease trade tensions.

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