US Trade Deficit Shrinks to 5 Month Low

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.

via Reuters

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