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The U.S. trade deficit narrowed for a fourth consecutive month in July, reflecting a decline in the value of imports and a slight recovery in exports that should help boost economic growth in the third quarter.
The gap narrowed 12.6% from the previous month to $70.65 billion, the smallest since October, according to Commerce Department data Sept. 7. The median estimate from a Bloomberg survey of economists called for a reduction in the deficit to $70.2 billion. Figures are not adjusted for inflation.
The value of exports of goods and services rose 0.2% to a record $259.3 billion, while imports fell 2.9% to a five-month low of nearly 330 billions of dollars.
Inbound shipments of consumer goods fell 9.8%, the highest in 1992 data. U.S. retailers are likely recalling orders from overseas suppliers as they focus on aligning inventory on sales.
The rapid rise in prices is weighing on domestic demand, limiting Americans’ means of spending. The remaining revenues are increasingly being spent on services and experiences following a pandemic-fueled boom in goods spending.
On an inflation-adjusted basis, July’s merchandise trade deficit narrowed to $103.4 billion, the lowest since October.
The decline in the value of consumer goods imports, unadjusted for inflation, was led by declines in pharmaceutical preparations and toys, games and sporting goods. Imports of industrial materials and food also fell. Inbound shipments of motor vehicles and capital goods increased.
US exports of capital goods, including industrial machinery, computer accessories and telecommunications equipment, helped boost total exports.
- Headline merchandise trade deficit fell 8.2% to $91.09 billion
- Travel exports, or spending by visitors to the United States, rose 5.2% to a more than two-year high of $11.59 billion
- Travel imports, a measure of Americans traveling abroad, fell 3.1% to $9.23 billion
- U.S. merchandise trade deficit with China narrowed 6.9% to around $34.4 billion
— With the help of Jordan Yadoo.