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Economy in Brief

U.S. Goods Trade Deficit Narrows in June
by Sandy Batten  July 27, 2022

• Lowest deficit since last November.

• Exports post fifth consecutive monthly rise while imports fell for third consecutive month.

• Marked narrowing in Q2 deficit points to meaningful contribution from net exports to Q2 GDP.

The advance estimate of the U.S. international trade deficit in goods narrowed to $98.2 billion in June from $104.0 billion in May. This was the third consecutive month in which the goods deficit has narrowed. A $102.5 billion deficit had been expected by the Action Economics Forecast Survey. For all of Q2, the goods trade deficit was $309.0 billion, a marked narrowing from $338.8 in Q1. This decline in the deficit during Q2 points to net exports adding more than 1%-point to overall GDP growth after having subtracted 3.2%-points in Q1.

In June, total exports rose 2.5% m/m (24.6% y/y), their fifth consecutive monthly advance, following a 1.5% m/m gain in May. Since January, exports have risen 16.3%. Total imports slipped 0.5% m/m (+18.4% y/y), their third consecutive monthly decline, after a downwardly revised 0.04% m/m fall in May. Imports have fallen 4.9% in the past three months.

The rise in exports in June was concentrated in foods, feeds and beverages (+5.3% m/m) and industrial supplies and materials (+6.5% m/m). Exports in the remaining major categories fell, led by a 3.6% m/m drop in exports of automotive vehicles and parts. Capital goods exports excluding autos declined 1.0% m/m in June.

The decline in imports in June was due to a 7.8% m/m drop in auto imports and a 1.1% m/m decline in imports of food, feeds and beverages. Imports in the remaining major categories rose, led by 1.3% m/m gain in "other" imports. Capital goods imports excluding autos increased 0.9% m/m following two consecutive monthly declines.

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.

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