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Economy in Brief

U.S. Foreign Trade Deficit Narrows in June
by Tom Moeller  August 4, 2022

• Deficit is smallest in six months.

• Exports continue to strengthen but imports fall.

• Petroleum imports increase.

• Trade deficit with China widens.

The U.S. trade deficit in goods and services (BOP basis) fell to $79.61 billion in June from $84.91 billion in May, revised from $85.55 and a record $107.65 billion in March, according to the U.S. Census Bureau. The June deficit was the smallest in six months. An $81.0 billion deficit had been expected in the Action Economics Forecast Survey. Exports grew 1.7% (22.8% y/y) following a 1.5% May rise. Imports eased 0.3% (+20.0% y/y) after increasing 0.6% in May.

The trade deficit in goods (customs value) narrowed to $98.18 billion from $104.04 billion in May. It was the smallest deficit since November and compared to a $98.18 billion deficit in the advance report released on July 27. Exports of goods rose 2.5% (24.6% y/y) following a 1.5% gain. Industrial supplies increased 6.5% (46.3% y/y). Exports of foods, feeds & beverages surged 5.8% (28.0% y/y). Nonauto consumer goods exports fell 1.4% (+15.3% y/y) while auto exports weakened 3.6% (+10.1% y/y). Exports of capital goods declined 2.4% (+5.8% y/y). Imports of goods eased 0.5% (+18.4% y/y) in June following little change in May. Nonauto consumer goods imports rose 0.6% (21.1% y/) while auto imports weakened 8.0% (+9.4% y/y). Foods, feeds & beverages fell 1.1% (+13.4% y/y) while capital goods imports improved 1.2% (14.4% y/y). Imports of industrial supplies gained 0.9% (29.9% y/y).

Petroleum imports increased 3.0% (62.1% y/y) in June following a 7.0% rise. Nonpetroleum imports, however, fell 0.8% in June (+15.1% y/y), the fourth decline in five months. The cost of crude oil rose to $100.63 per barrel from $97.54 per barrel.

The real (inflation-adjusted) goods trade deficit fell to $113.19 billion (chained 2012 dollars) in June from $116.27 billion in May. Real exports of goods rose 1.3% (7.5% y/y) after a 1.1% decline. Real imports of goods fell 0.4% (+8.2% y/y), the fourth decline in five months. Shrinkage in the real trade deficit added 1.4 percentage points to real GDP growth in the second quarter.

The surplus on services trade improved to $19.87 billion in June from $19.53 billion in May. The surplus remained significantly below a record-high of $26.87 billion in January 2018. Exports of services rose 1.0% (17.7% y/y) after a 0.2% improvement in May. Services imports advanced 0.7% in June (27.3% y/y) following four straight months of strong increase.

The goods trade deficit with China widened to a seasonally adjusted $36.89 billion from $32.15 billion in May. Exports weakened 4.7% (-7.6% y/y) while imports rose 9.3% (23.4% y/y). The trade deficit with Japan eased to $4.67 billion from $5.87 billion as exports fell 4.1% (4.5% y/y) and imports declined 11.5% (+0.9% y/y). The goods trade deficit with the European Union widened to $17.64 billion in June, the largest since January, from $17.1 billion in May. Exports declined 3.5% (+30.7% y/y) and imports fell 1.1% (+12.2% 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.

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