With the value of exports climbing and the value of imports edging lower, the Commerce Department released a report on Thursday showing the U.S. trade deficit narrowed in the month of July.
The Commerce Department said the trade deficit narrowed to $70.1 billion in July from a revised $73.2 billion in June, which still represented a record high.
Economists had expected the trade deficit to narrow to $71.0 billion from the $75.7 billion originally reported for the previous month.
Andrew Hunter, Senior U.S. Economist at Capital Economics, said the narrower trade deficit suggests that net trade will “flip from being a drag on GDP growth in recent quarters to a small positive in the third.”
The narrower trade deficit came as the value of exports jumped by 1.3 percent to $212.8 billion in July after rising by 0.6 percent to $210.1 billion in June.
Exports of capital goods, automotive vehicles, parts and engines, and gem diamonds showed notable increases during the month.
Meanwhile, the report said the value of imports dipped by 0.2 percent to $282.9 billion in July surging up by 2.2 percent to $283.3 billion in June.
Significant decreases in imports of consumer goods and industrial supplies and materials were partly offset by a jump in imports of automotive vehicles, parts and engines.
The report also said the goods deficit narrowed to $87.7 billion in July from $93.3 billion in June, while the services surplus fell to $17.7 billion from $20.0 billion.
“Looking ahead, we expect the deficit to narrow further as foreign consumption gains momentum and domestic demand decelerates,” said Mahir Rasheed, U.S. Economist at Oxford Economics.
He added, “The pandemic will continue to pose a downside risk to trade flows, but we expect a gradual normalization in trade dynamics as vaccinations increase and supply disruptions slowly ease.”
Source: Read Full Article