US visible trade deficit sees sharp and unexpected narrowing in July
By Alexander Bueso
Date: Friday 26 Aug 2022
(Sharecast News) - America's shortfall on trade in goods with the rest of the world narrowed sharply last month, amid a large and unexpected drop in purchases from overseas.
According to a preliminary estimate from the Department of Commerce, the foreign trade deficit in goods dropped at a month-on-month pace of 9.7% to reach -$89.1bn in July (consensus: -$99.0bn).
Imports fell by 3.5% on the month to $270.0bn while exports edged down by 0.22% to $181.0bn, both in nominal terms.
Yet "major" declines seen in export and import prices in July meant that in real or inflation-adjusted terms exports were up by 3.0% and imports off by 2.1%, said Paul Ashworth, chief North America economist for Capital Economics.
Ashworth added that could translate into a more three percentage point boost to third quarter GDP growth, although the decline in imports - which was led by consumer goods - was a concern if it reflected weaker domestic demand.
Yet "major" declines seen in export and import prices in July meant that in real or inflation-adjusted terms exports were up by 3.0% and imports off by 2.1%, said Paul Ashworth, chief North America economist for Capital Economics.
Ashworth added that could translate into a more three percentage point boost to third quarter GDP growth, although the decline in imports - which was led by consumer goods - was a concern if it reflected weaker domestic demand.
Wholesale inventories on the other hand increased by only 0.8% on the month to reach $902.9bn (Barclays Research: 1.7%).
Retail inventories jumped by 1.1% alongside to $730.7bn.
Slower inventory accumulation could be a drag on the Q3 rate of GDP expansion but all in all "GDP growth could now be as strong as 3.5% annualised".
Special promo:
Trading the Forex Market? Visit FXmania.com to get advanced infomation about currencies and the Foreign Exchange
Market.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN