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

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