US Trade Deficit Widens in July

The US trade deficit widened more than expected in June as an acceleration in domestic demand in the second quarter and a strong dollar sucked in imports of food and automobiles.

The country’s Commerce Department said the trade gap increased 7.1% to $43.8 billion, which also reflected a second straight monthly drop in exports.

May’s trade gap was revised to $40.9 billion from the previously reported $41.9 billion.

Economists had forecast the trade deficit rising to $42.8 billion. When adjusted for inflation, the deficit increased to $59.3 billion in June from $57.6 billion in the prior month.

The trade data likely will have a marginal impact on the second quarter gross domestic product estimate released last week, as the deficit on the goods balance came in a bit higher than the advance figure incorporated in the GDP report.

In that report, the government estimated the economy expanded at a 2.3% annual pace, with trade adding 0.13 percentage point to GDP.

But following stronger-than-forecast construction and factory inventory data, economists expected GDP would be revised to as high as a 3% annual rate when the government publishes its second GDP estimate later this month.

via RTE

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza