OTTAWA- Canada's exports and imports both fell in August, hinting that the momentum of the recovery from the COVID-19 crisis could have slowed more than anticipated, data from Statistics Canada showed on Tuesday.

Imports fell 1.2%, while exports were down 1.0%. Canada's trade deficit, meanwhile, narrowed slightly to C$2.45 billion ($1.85 billion), missing analyst expectations of C$2.0 billion.

Statscan revised July's trade deficit to C$2.53 billion from an initial C$2.45 billion.

"The slowdown in trade showed up earlier than we had anticipated, and the drop in export volumes suggests that the recovery's momentum could have slowed more than anticipated in August," said Royce Mendes, senior economist at CIBC Economics, in a note.

Lower imports of aircraft and other transportation equipment and parts drove the import decline, while exports fell after three months of strong gains on lower exports of passenger cars and light trucks, Statscan said.

Imports from Canada's largest trading partner, the United States, fell 1.6%, while exports to that country were up 1.0% on higher lumber exports. Exports to all countries remained 7% below pre-pandemic levels, while imports remained down 5.1%, Statscan said. "Overall, the fact that we haven't fully recovered in the merchandise side is a disappointment," said Ross Prusakowski, principal economist at Export Development Canada.

Prusakowski noted that some of the export weakness was temporary, pointing to a strike at the Port of Montreal in August that had an impact on shipments, particularly to Europe.

"That's one area where we think there might be some strength coming back," Prusakowski said.

Analysts also noted that a July boost caused by shorter seasonal shutdowns at most auto assembly plants did not continue into August, returning trade in that segment to more typical levels.

Still, export levels of passenger cars and light trucks were almost C$200 million higher than in February, Statscan said.

The Canadian dollar was trading nearly unchanged after the data at 1.3260 to the greenback, or 75.41 U.S. cents.

($1 = 1.3251 Canadian dollars)

(Reporting by Julie Gordon and David Ljunggren in Ottawa, additional reporting by Fergal Smith in Toronto; Editing by Steve Orlofsky and Nick Zieminski) ((julie.gordon@thomsonreuters.com; 613-235-6745; Reuters Messaging: julie.gordon.thomsonreuters.com@reuters.net))