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Economy in Brief

U.S. Trade Deficit Narrowed
by Tom Moeller August 14, 2007

In June, the U.S. foreign trade deficit narrowed to $59.2B from a revised $59.2B in May. Consensus expectations had been for a deeper deficit of $62.0B.

Total exports jumped 1.5% after also surging 2.6% in May. The gain mostly reflected higher exports of industrial supplies. Exports of non-auto consumer goods fell 1.4% (+9.2% y/y) while capital goods exports rose just 0.2% (5.2% y/y). Exports of advanced technology goods rose a strong 8.5% (NSA, 9.0% y/y).

Exports of services from the U.S. were firm again and rose 0.6% (13.2% y/y) while imports of services rose the same 0.6% (4.7% y/y).

Imports of nonpetroleum products were strong again and increased 1.0% (4.6% y/y) but imports of petroleum products fell 0.2% (-1.1% y/y). Capital goods imports jumped again, in June by 1.6% (7.0% y/y) but imports of nonauto consumer goods fell 0.6% (+5.9% y/y). Imports of advanced technology products surged 8.3% (12.3% y/y).

The U.S. trade deficit in goods with China deteriorated to $21.2B from $20.0B in May as imports surged 6.8% (12.8% y/y. U.S. exports to China, however, were also strong and posted a 10.8% (35.7% y/y) jump.

Globalization and Capital Markets: Implications for Inflation and the Yield Curve is a speech delivered by Fed Governor Randall S. Kroszner and it can be found here.

Foreign Trade  June May Y/Y 2006 2005 2004
U.S. Trade Deficit $58.1B $59.2B $64.5B
$758.5 $714.4B $612.1B
Exports - Goods & Services 1.5% 2.6% 11.2% 12.7% 10.9% 13.7%
Imports - Goods & Services 0.5% 2.1% 3.8% 10.4% 12.9% 16.8%
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