The U.S. found its trade deficit with the rest of the world increased less than expected in July as both exports and imports fell, suggesting that trade could contribute to economic growth in the third quarter.
Figures released Wednesday by the U.S. Commerce Department showed the trade gap rose 0.3% to $43.7 billion. June's trade deficit was revised down slightly to $43.5 billion from the previously reported $43.6 billion.
Economists had forecast the trade shortfall widening to $44.6 billion in July. When adjusted for inflation, the trade deficit increased to $61.6 billion from $60.8 billion in June. The so-called real goods deficit in July was below the second-quarter average of $62.4 billion.
While that suggests trade could add to gross domestic product in the third quarter, experts in academia cautioned that Hurricane Harvey could significantly impact commodity prices and trade volumes, and push up the trade deficit in September.
The politically sensitive U.S.-China trade deficit increased to an 11-month high in July. That ongoing deficit has grabbed the attention of President Donald Trump, who has blamed it for helping to decimate U.S. factory jobs as well as stunting U.S. economic growth.
