Narrowing of US Trade Deficit in June Shows Export Swing
America’s trade deficit narrowed to an eight-month low in June, helped by the biggest outflow of goods and services since the end of 2014, a positive signal for the economy entering the third quarter, Commerce Department data showed Aug. 4.
Highlights of June Trade Balance
• Gap shrank 5.9% to $43.6 billion (estimated $44.5 billion.)
• Exports rose 1.2% to $194.4 billion, boosted by shipments of capital equipment, petroleum and soybeans.
• Imports fell 0.2% to $238 billion due to declines in crude oil and consumer goods.
Key Takeaways
Firmer overseas demand has helped boost sales of American-made goods and services, with trade contributing to economic growth in four of the last five quarters. A weaker dollar may also be benefiting U.S. exporters. Net exports added almost 0.2 percentage point to gross domestic product growth in the second quarter.
On the other side of the trade ledger, imports of consumer goods declined for a second month, underscoring a softer demand picture as advertised by weaker retail sales in May and June.
America’s merchandise trade gap with Mexico narrowed to a seasonally adjusted $5.5 billion, while the gap with China increased to $31.3 billion in June.
Other Details
• After eliminating the effects of price fluctuations, which generates the numbers used to calculate GDP, the merchandise trade gap shrank to $61 billion in June from $62.8 billion.
• June imports of consumer goods fell to $48.8 billion from $49.5 billion.
• Exports of capital goods climbed to $43.9 billion in June from $43.1 billion and shipments of food overseas rose to $11.8 billion.
• Excluding petroleum, the deficit in goods and services shrank to $39.3 billion in June from $40.2 billion.
With assistance by Chris Middleton
