US Trade Gap Narrows to 8-Month Low

The goods and services deficit in the United States narrowed to USD 43.6 billion in June 2017 from USD 46.4 billion a month earlier and compared to market expectations of a USD 45 billion gap. It was the smallest trade deficit since October 2016, as exports increased to their highest level in 2-1/2 years.

The June decrease in the goods and services deficit reflected a decrease in the goods deficit of USD 2.1 billion to USD 65.2 billion and an increase in the services surplus of USD 0.6 billion to USD 21.6 billion.

Exports rose USD 2.4 billion, or 1.2 percent, to USD 194.4 billion from USD 192.0 billion in the previous month. It was the highest level in exports since December 2014, boosted by higher sales of capital goods (up USD 0.8 billion); food, feeds, and beverages (up USD 0.7 billion), of which soybeans (up USD 0.6 billion); and motor vehicles (up USD 0.4 billion). By contrast, exports of consumer goods decreased USD 0.3 billion, mainly due to lower sales of pharmaceutical preparations (down USD 0.4 billion).

Imports fell USD 0.4 billion, or 0.2 percent, to USD 238 billion from USD 238.4 billion in May, due to lower purchases of industrial supplies and materials (down USD 1.1 billion), of which crude oil (down USD 1.4 billion); and consumer goods (down USD 0.7 billion). Meanwhile, imports of motor vehicles rose USD 1 billion, as purchases of passenger cars jumped USD 1.3 billion.

On a non-seasonally adjusted basis, exports of goods rose to Japan (8.3 percent), Mexico (7.4 percent), Canada (1.1 percent) and the EU (0.2 percent), while sales to China dropped 4.7 percent. Imports of goods fell from Canada (-1.8 percent) and the EU (-0.7 percent), but rose from Japan (1.8 percent), China (1.2 percent) and Mexico (0.5 percent).

The US trade deficit narrowed with Mexico (USD -6.0 billion from USD -7.3 billion in May), Canada (USD -0.6 billion from USD -1.4 billion), the EU (USD -12.5 billion from USD -12.8 billion) and Japan (USD -5.6 billion from USD -5.8 billion) but widened with China (USD -32.6 billion from USD -31.6 billion). 

Year-to-date, the goods and services deficit increased USD 26.7 billion, or 10.7 percent, from the same period in 2016. Exports increased USD 64.9 billion or 6.0 percent. Imports increased USD 91.7 billion or 6.9 percent.

US Trade Gap Narrows to 8-Month Low

BEA | Joana Ferreira |
8/4/2017 1:01:11 PM