The U.S. trade deficit fell in July to its lowest level in five months as exports rose, signaling underlying strength in the economy amid concerns about a global growth slowdown.
The Commerce Department said on Thursday the trade gap narrowed 7.4 percent to $41.9 billion, the smallest since February. June’s trade deficit was revised to $45.2 billion from the previously reported $43.8 billion.
Economists had forecast the trade gap shrinking to $42.4 billion. When adjusted for inflation, the deficit fell to $56.2 billion in July from $59.0 billion in the prior month.
The smaller deficit implied a modest contribution to gross domestic product from trade early in the third quarter. Trade contributed 0.3 percentage point to the economy’s 3.7 percent annualized growth rate in the second quarter.
Data ranging from consumer spending to employment and housing have suggested the economy retained much of its momentum from the second quarter and was on solid footing when global financial markets were rocked by turbulence triggered by worries over China’s economy.