The US trade deficit narrowed slightly less than analysts anticipated in June, according to government data released Tuesday, helped by an uptick in exports.
The trade gap in the world’s biggest economy was down 2.5 percent to $73.1 billion, slightly larger than the $72.8 billion that analysts expected, the Commerce Department said.
The figure was helped by a bigger uptick in exports than imports, with the former rising 1.5 percent to $265.9 billion.
The civilian aircraft and industrial supplies sectors helped boost exports, while imports rose on the back of goods like pharmaceutical preparations and semiconductors.
But the imports were offset by a decrease in some areas, including crude oil, the report showed.
The US goods deficit with China slipped $1.6 billion to $22.3 billion in June, the Commerce Department report showed.
– GDP drag –
“This report confirms that trade was a drag on GDP growth in the second quarter — as revealed in the initial GDP estimates,” said economists Carl Weinberg and Rubeela Farooqi of High Frequency Economics in a note.
“The widening of the deficit is due to a solid rise in imports caused by ongoing strong domestic demand,” they added.
US consumer demand has been weakening, while the jobs market cooled significantly in July in the face of high interest rates.
US economist Matthew Martin of Oxford Economics believes inventory levels signal that “businesses believe there is healthy demand on the horizon from consumers.”
Oxford Economics expects imports to continue outpacing exports for the rest of the year.
“Exports have struggled due to weak global demand and the weight of a strong dollar. However, the global backdrop is brightening slightly, and the greenback has been relatively stable this year,” Martin added in a note.