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U.S. Goods-Trade Deficit Narrowed in July to Three-Month Low

U.S. Goods-Trade Deficit Narrowed in July to Three-Month Low

(Bloomberg) --

The U.S. merchandise-trade deficit unexpectedly narrowed in July to a three-month low as exports picked up and imports declined.

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%.

U.S. Goods-Trade Deficit Narrowed in July to Three-Month Low

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.

To contact the reporter on this story: Reade Pickert in Washington at epickert@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle, Margaret Collins

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