• Trade deficit increased to $79.3 billion in July from $71.0 billion in June.

• Exports and Imports both grow by 11.8%. Imports roughly 70% larger than exports causing widening.

• Exports still 16.5% below February 2020 level. Imports down just 1.1%.

The advance estimate of the U.S. trade deficit in goods widened substantially more than expected to $79.32 billion in July from $70.99 in June (the June figures as well as the month-on-month and year-on-year comparisons below are based on revised data from the monthly International Trade Report; updated July figures will be released next week). The Action Economics Forecast Survey anticipated a $72.6 billion deficit.

Both exports and imports of goods grew 11.8% on the month (-15.9% and -7.6% y/y respectively). The trade deficit widened substantially because imports are roughly 70% larger than exports. Despite this growth, exports are still 16.5% below their February level and 19.4% from the May 2018 peak. Meanwhile, imports are down just 1.1% from February, but 10.5% from their October 2018 peak.

All major categories of exports and exports -- which is the only data available in the Advance Trade report -- grew. Exports of capital goods, which vies with industrial supplies to be our largest export category increased 7.5% (-17.0% y/y). Industrial supplies were up 7.1% (-18.4% y/y), Imports of nonfood consumer goods, gained 6.6% (-3.4% y/y) while capital goods, the second largest import category and an indicator of capital spending, grew 8.0% (-3.4% y/y).

The advance international trade data can be found in Haver's USECON database. The expectation figure is from the Action Economics Forecast Survey, which is in AS1REPNA.

Note: Current month is based on Advance Trade data; Previous months reflect revised data from International Trade release.