US trade deficit in August rises 3 percent to $40.7 billion

The U.S. trade deficit rose in August as a flood of imports which offset the best showing for exports in 13 months. The politically sensitive deficit with China rose to the highest level in 11 months.

The Commerce Department says the trade deficit increased 3 percent to $40.7 billion, up from a gap of $39.5 billion in July. Imports jumped 1.2 percent to $228.6 billion, reflecting big increases in shipments of foreign oil, autos and commercial aircraft. Exports were up 0.8 percent to $187.9 billion, the fourth straight monthly increase and the highest level in 13 months.

Analysts are hopeful that export sales will pick up after a rough two years when American producers had to battle a rising dollar that made their products costlier overseas.