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Economy in Brief

U.S. Trade Deficit Narrows in July as Exports Rise
by Tom Moeller  September 2, 2021

• Nonpetroleum imports decline.

• Services surplus declines sharply.

• Deficit with China continues to narrow.

The U.S. trade deficit in goods and services fell to $70.05 billion during July from $73.23 billion in June, revised from a record $75.75 billion. The data extend back to January 1992. A deficit of $73.2 billion was expected in the Action Economics Forecast Survey. Exports increased 1.3% (24.5% y/y) following a 0.6% gain while imports eased 0.2% in July (+22.1% y/y) after rising 2.2% in June.

The trade deficit in goods narrowed to $86.82 billion from a little-revised $92.01 billion in June. It compared to a $86.38 billion deficit in the advance report issued last week. Exports of goods rose 1.8% in July (28.0% y/y) after edging 0.1% higher in June. Auto exports surged 5.3% (1.7% y/y) following a 1.8% rise. Nonauto consumer goods exports strengthened 4.5% (26.8% y/y) in July after a 0.3% gain. Food exports rose 0.4% (19.9% y/y) after falling 8.9% in June and industrial supplies & materials exports increased 0.3% (51.1% y/y). Nonauto capital goods exports rose 2.2% (18.3% y/y) after modest declines in each of the prior two months. Imports of goods declined 1.1% (20.0% y/y) after increasing 1.7%. Industrial supplies & materials imports fell 2.9% (38.4% y/y) after rising 8.7% in June. Nonauto consumer goods imports rose by 3.4% (+11.6% y/y) after a 2.5% drop. Foods, feeds & beverage imports fell 0.5% (+25.4% y/y) following four straight months of strong increase. Capital goods imports eased 0.1% (+16.6% y/y) after a 1.3% gain. To the upside, auto imports rose 3.8% (13.4% y/y) following three straight months of decline.

Petroleum imports rose 3.1% in July (121.4% y/y) after three months of strong increase. The price of crude oil rose to an average $67.94 per barrel from $64.97 in June. The price has increased from $40.12 per barrel one year ago. Nonpetroleum imports fell 1.4% (+15.7% y/y) and reversed the 1.7% June rise.

The real (adjusted for price changes) trade deficit in goods fell to $100.1 billion from the near-record $105.0 billion (chained 2012 dollars) in June. Real exports of goods gained 1.0% (9.8% y/y) after falling for two straight months. Real imports of goods declined 1.4% (9.5 y/y) following a 0.9% June increase.

The surplus of trade in services narrowed sharply in July to $17.7 billion from $20.0 billion one year earlier. The value of services exports edged 0.1% higher (16.7% y/y) but travel exports declined 3.1% (+48.0% y/y). Service imports rose 5.5% (33.1% y/y) led by a 22.6% rise (430.8% y/y) in travel.

The trade deficit with China declined to a seasonally adjusted $25.0 billion. Exports rose 0.5% (27.6% y/y) while imports weakened 4.9% (-1.2% y/y). The trade deficit with Japan deepened sharply to $6.0 billion as exports fell 8.1% (+25.6% y/y) and imports rose 4.9% (50.3% y/y). The deficit with the European Union eased to $18.1 billion. Exports rose 0.5% (17.4% y/y) and imports declined 3.3% (+27.1% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.

Foreign Trade in Goods & Services (Current $) Jul Jun May Jul '20 2020 2019 2018
U.S. Trade Deficit ($ bil.) 70.05 73.23 68.54 60.74 676.69 576.34 580.95
Y/Y%
Exports of Goods & Services (% Chg) 1.3 0.6 0.9 24.5 -15.6 -0.4 6.2
Imports of Goods & Services (% Chg) -0.2 2.2 1.4 22.1 -9.5 -0.5 7.4
  Petroleum (% Chg) 3.1 2.9 10.9 121.4 -39.7 -14.0 20.8
  Nonpetroleum Goods (% Chg) -1.4 1.7 0.5 15.7 -3.5 -0.5 7.3
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