U.S. Trade Deficit Widens to $65.02 Billion in July
- Deficit widens in July after narrowing in the previous two months.
- Exports rise m/m for the first time since March; imports rise m/m for the first time since April.
- Real goods trade deficit widens to $88.43 billion.
- A widening trade balance (net exports) has subtracted 0.2%-pts. from GDP growth in Q2’23.
- Goods trade deficit w/ China widens, while trade shortfalls w/ EU and Japan narrow.
The U.S. trade deficit in goods and services (BOP basis) widened to $65.02 billion in July after narrowing to a revised $63.72 billion in June ($65.50 billion originally), according to the U.S. Census Bureau. The July deficit was smaller than the $71.67 billion in July 2022. A $67.9 billion deficit had been expected in the Action Economics Forecast Survey. Exports grew 1.6% m/m (-3.5% y/y) in July, the first monthly gain since March, after a 0.05% easing in June (-0.1% originally). Imports rose 1.7% (-4.7% y/y), the first m/m rise since April and the largest since January, after an unrevised 1.0% June decline.
The widening in the goods & services deficit in July reflected a widening goods trade deficit of $89.98 billion compared to an $87.99 billion deficit in June. Goods exports increased 2.0% (-7.9% y/y), the first m/m gain since March, after a 0.04% June dip. Imports of goods rose 2.1% (-5.4% y/y), the first m/m rise in three months, following a 1.2% June decline. The services trade surplus increased to $24.96 billion in July, the highest level since November 2019, from $24.27 billion in June. Services exports rose 0.8% (7.0% y/y), the fifth m/m rise in six months, after a 0.1% June downtick. Services imports were virtually unchanged (-1.5% y/y) in July and June following three consecutive m/m declines.
The real (inflation-adjusted) goods trade deficit widened to $88.43 billion (chained 2017 dollars) in July after narrowing to $85.83 billion in June; it was slightly bigger than the $87.37 billion in July 2022. Real exports of goods rose 1.1% (-1.7% y/y), the third straight m/m rise, on top of a 0.6% June gain. Real imports of goods grew 1.8% (-0.6% y/y), the first m/m increase since April, after a 1.0% June decline. A widening trade balance (net exports) has subtracted 0.2%-points from GDP growth in Q2 2023 after adding 0.6%-points in Q1 2023.
The customs value goods trade deficit widened to $90.92 billion in July after narrowing to $88.55 billion in June; it was slightly larger than the $89.63 billion in July last year. The latest figure was roughly in line with a $91.18 billion deficit in the advance report released on August 30. Custom value exports rose 1.7% (-8.6% y/y), the first m/m rise since March, after a 0.02% dip, reflecting exports rises of 11.3% (19.2% y/y) in automotive vehicles, parts & engines, 2.5% (-24.2% y/y) in industrial supplies & materials, 0.2% (4.3% y/y) in nonfood consumer goods excluding autos, and 0.2% (3.6% y/y) in capital goods excluding autos. Exports for other goods, however, slid 5.1% (+7.9% y/y) following two consecutive m/m rises and those for foods, feeds & beverages fell 0.3% (-19.1% y/y), the fourth m/m fall in five months.
Customs value imports rose 2.1% (-5.2% y/y) in July, the first m/m rise in three months, after a 1.2% decline in June, reflecting imports gains of 4.1% (-4.0% y/y) in nonfood consumer goods excluding autos, 4.0% (-0.5% y/y) in foods, feeds & beverages, 3.8% (16.6% y/y) in other goods, 3.2% (-1.5% y/y) in capital goods excluding autos, and 1.9% (19.2% y/y) in automotive vehicles, parts & engines. To the downside, imports for industrial supplies & materials fell 2.7% (-25.8% y/y), the eighth m/m fall in nine months. Meanwhile, petroleum imports rebounded 2.3% (-35.3% y/y) in July following five straight m/m drops. Nonpetroleum imports rose 2.0% (-1.8% y/y) after two successive m/m declines.
The 0.8% July rebound (7.0% y/y) in services exports was led by exports rises of 3.6% (22.9% y/y) in travel services and 2.3% (8.3% y/y) in transport services. The July m/m virtually unchanged reading (-1.5% y/y) in services imports notably reflected a 6.5% decrease (+12.5% y/y) in maintenance & repair services but a 2.2% rebound (19.4% y/y) in travel services.
The goods trade deficit with China widened to a seasonally adjusted $24.00 billion in July after narrowing to $22.77 billion in June. Exports rose 3.5% (-14.2% y/y) following three consecutive m/m drops; imports rebounded 4.8% (-22.5% y/y) after two successive m/m declines. The goods trade deficit with the European Union narrowed to $17.31 billion in July after widening to $18.20 billion in June. The trade shortfall with Japan fell to $5.89 billion after widening to $6.08 billion in the previous month.
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.
Winnie TapasanunAuthorMore in Author Profile »
Winnie Tapasanun has been working for Haver Analytics since 2013. She has almost 20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (almost 30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.