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Economy in Brief

U.S. Goods Trade Deficit Widens Substantially in July
by Gerald D. Cohen  August 28, 2020

• 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.

Advance U.S. Foreign Trade in Goods (Customs Value $) Jul Jun May Jul Y/Y 2019 2018 2017
U.S. Trade Deficit ($ bil.) -79.32 -70.99 -75.38 -73.64
-854.37 -872.04 -792.40
Exports (% Chg) 11.8 14.3 -6.0 -15.9 -1.4 7.7 6.6
Imports (% Chg) 11.8 5.1 -0.6 -7.6 -1.6 8.5 7.0

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

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