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Economy in Brief

U.S. Foreign Trade Deficit Improved Slightly
by Tom Moeller August 10, 2006

The U.S. foreign trade deficit improved slightly in June to $64.8 billion from a revised $65.0 billion in May. Consensus expectations had been for a $65.7 billion deficit in June.

Total exports rose 2.0% in June (+14.0% y/y) after a downward revised 2.1% gain in May, while imports were 1.2% higher in June (+12.9% y/y) after an upward revised rise of 2.3% in the previous month.

The value of goods exports was $86.6 billion (+3.0% in June) with the largest increases in capital goods (+2.6%), industrial supplies and materials (+3.2%) and automotive vehicles and parts (+4.7%). June imports of goods rose 1.2% from May to $156.9 billion with gains in consumer goods (+3.4%), and in automotive vehicles and parts (+5.8%). Decreases were evident in imports of industrial supplies and materials (-1.2%) and in capital goods (-0.3%).

While the goods deficit decreased by $0.7 billion to $70.4 billion in June, the services surplus was $0.5 billion lower than in May at $5.6 billion. Services exports for the month (mostly in travel and other private services) were down by $0.2 billion and imports of services advanced $0.3 billion (largely in royalties, license fees and passenger fares.

The U.S. trade deficit in goods with China rose to $19.7 billion in June (the third highest on record) from $17.7 billion in May. The deficit with Mexico increased $0.6 billion to surpass $6 billion for the first time.

Foreign Trade  Jun May Y/Y 2005 2004 2003
Trade Deficit $64.8B $65.0B $58.4B
$716.7B $611.3B $494.9B
Exports - Goods & Services +2.0% +2.1% +14.0% 10.7% 13.4% 4.2%
Imports - Goods & Services +1.2% +2.3% +12.9% 13.0% 16.7% 8.3%
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