U.S. Trade Deficit Narrows Slightly in June

The U.S. trade deficit in goods and services (BOP basis) narrowed to $73.1 billion during June from $75.0 billion in May, revised from $75.1 billion, according to the U.S. Census Bureau. The Action Economics Forecast Survey expected a deficit of $72.5 billion. Exports rose 1.5% (5.9% y/y) last month following a 0.5% slip during May. Imports edged 0.6% higher (7.3% y/y) following a 0.3% decline in May.

The goods deficit (Census) declined to $96.6 billion in June from $99.1 billion. It was the shallowest deficit in three months. Goods exports rose 2.7% in June (6.1% y/y) after a 1.6% decline. The strength in goods exports was spread across end-use categories including a 5.2% rise in auto exports, a 3.7% gain in capital goods and a 4.9% jump in foods, feeds & beverages exports. Nonfood consumer goods exports excluding autos edged 0.2% higher. Imports of goods rose 0.8% (7.1% y/y) following a 0.7% slip during May. Consumer goods imports rose 3.7% and capital goods imports increased 2.9%. Offsetting these gains, industrial supplies & materials imports fell 3.4%, auto imports were off 0.6%, foods, feeds & beverage imports fell 1.6% and motor vehicle imports weakened 0.6%.

The services surplus narrowed to $24.2 billion in June from $24.8 billion in May. Exports of services slipped 0.5% (+7.0% y/y) after a 1.3% May gain. Travel exports declined 2.0% and transport exports weakened 1.0%. These declines were offset by a 0.9% rise in construction exports and a 0.5% rise in insurance exports. Imports of services rose 0.2% (8.7% y/y) in June after a 1.8% gain in May. The increase reflected a 0.7% rise in travel imports, a 1.2% decline in transport and a 0.6% rise in financial services imports. Charges for use of intellectual property rose 0.7%.

The real (inflation-adjusted) goods trade deficit (customs value) narrowed to $91.4 billion in June from $93.9 billion in May. Real exports of goods increased 3.2% (4.8% y/y) after a 0.7% monthly decline in May. Real imports of goods rose 0.9% (5.4% y/y) following a 0.4% slip May. During 2Q’24, trade deficit deterioration subtracted 0.72 percentage point from real GDP growth.

The U.S. goods trade deficit with China narrowed to a seasonally adjusted $22.3 billion in June from $23.9 billion in May. Exports strengthened 6.8% while imports fell 2.2%. The goods trade deficit with the European Union fell to $18.0 billion in June from $19.3 billion in May. Exports increased 5.5% and imports edged 0.6% higher. The trade deficit with Japan declined to $4.9 billion in June from $6.3 billion in May. Exports jumped 12.4% while imports declined 4.4%.

The international trade data, including relevant data on oil prices, can be found in Haver’s USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.