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Economy in Brief

U.S. Goods Trade Deficit Narrows for the Fourth Straight Month in July
by Winnie Tapasanun  August 26, 2022

• $89.1 billion deficit in July, lowest since October 2021.

• Exports decline 0.2% m/m following five straight monthly increases.

• Imports drop for the fourth consecutive month.

The advance estimate of the U.S. international trade deficit in goods narrowed to $89.1 billion in July from $98.6 billion in June, according to the U.S. Census Bureau. This was the fourth straight month in which the goods deficit had narrowed. A $98.1 billion deficit had been expected by the Action Economics Forecast Survey. The goods trade deficit shrank to $308.9 billion in Q2'22 from $338.8 billion in Q1'22. The narrower deficit showed net exports added 1.4%-points to Q2 GDP growth after having subtracted 3.2%-points in Q1.

Total exports eased 0.2% m/m (+22.9% y/y) in July, the first monthly decline since January, after a 2.1% increase in June. However, exports have risen 16.0% since January. Total imports slid 3.5% (+15.4% y/y) in July, the fourth successive m/m slide, after a 0.4% decline in June. Imports have fallen 8.2% in the past four months.

The decline in exports in July reflected exports m/m drops of 8.1% (+16.5% y/y) in foods, feeds & beverages, 3.4% (+7.8% y/y) in consumer goods excluding autos, and 2.3% (+44.0% y/y) in industrial supplies. To the upside, exports of other goods (10.7% m/m; 24.2% y/y), automotive vehicles & parts (6.3% m/m; 13.3% y/y) and capital goods excluding autos (4.4% m/m; 8.4% y/y) posted their monthly gains.

The slide in imports in July reflected imports m/m drops of 11.9% (-15.6% y/y) in other goods, 10.4% (+11.2% y/y) in consumer goods excluding autos, 5.3% (+7.9% y/y) in foods, feeds & beverages, and 2.9% (+29.7% y/y) in industrial supplies. In contrast, imports of automotive vehicles & parts (5.8% m/m; 12.8% y/y) and capital goods excluding autos (0.5% m/m; 15.3% y/y) registered their monthly increases.

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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