(Bloomberg) --
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The U.S. merchandise-trade deficit unexpectedly narrowed in July to a three-month low as exports picked up and imports declined.
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The gap shrank to $72.3 billion in July from $74.2 billion the month prior, Commerce Department data showed Thursday. That compared with forecasts of a widening to $74.4 billion. Exports increased 0.7% and imports dropped 0.4%.
Key Insights
- Imports and exports of goods both shrank in the second quarter, weighing on the economy, and the latest figures will offer a glimpse of how trade will impact gross domestic product in the third quarter.
- Thursday’s data comes just before a 15% levy is placed on another batch of Chinese goods Sept. 1. Since May, President Donald Trump has announced a series of higher tariffs on imports from China.
- The gain in merchandise exports reflected more overseas shipments of capital equipment, motor vehicles and consumer goods. Meantime, imports of capital goods declined.
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- The report also showed wholesale inventories rose 0.2% in July and retail inventories climbed 0.8%, the most since January. Analysts look to these numbers to adjust estimates for economic growth during the quarter.
- Exports and imports of goods account for about three-fourths of America’s total trade; the U.S. typically runs a deficit in merchandise and a surplus in services.
- Thursday’s figures cover goods only. The Commerce Department will release full July data for international trade Sept. 4, including services and more details on merchandise shipments.
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