The US trade deficit narrowed in June amid a sharp pullback in imports, while exports also saw a drop, government data showed Tuesday.
The goods and services deficit fell 5.6% sequentially to $73.26 billion in June on a seasonally adjusted basis, according to the Census Bureau and the Bureau of Economic Analysis. The consensus was for a deficit of $73 billion in a Bloomberg-compiled survey.
"June's report showed a welcome narrowing in the trade gap," BMO Capital Markets Senior Economist Priscilla Thiagamoorthy said in a note. "Exports were weighed down by a sharp drop in energy shipments, while softer imports did most of the work in reducing the deficit."
Imports decreased 1.8% to $387.99 billion, while exports eased 0.9% to $314.73 billion, the lowest level since February. The imports and exports of services in June were the highest on record, according to official data.
The US had a $21.59 billion deficit in goods trade with Vietnam in June, up from a $20.58 billion gap the month prior. The deficit with Mexico rose to $20.28 billion from $20.12 billion. The deficit with Taiwan shrank to $14.93 billion from $19.39 billion. The deficit with China jumped to $15.35 billion from $14.47 billion. The goods trade deficit with the European Union rose to $10.9 billion from $9.32 billion, the report showed.
In the year through June, the goods and services deficit dropped about 34% from a year earlier.
"We still see net exports subtracting from (gross domestic product) growth in the couple quarters ahead," Thiagamoorthy said.
Last week, government data showed US economic growth slowed more than expected in the second quarter, though consumer spending seemed to shrug off intensifying price measures.
