The U.S. trade deficit widened in July for the first time in four months as the global economic slowdown reduced demand for American-made goods.
The gap grew 0.2% to $42 billion U.S., smaller than projected, from a revised $41.9 billion U.S. in June, Commerce Department figures showed today in Washington. The median forecast in a Bloomberg survey called for a $44-billion U.S. deficit. Exports fell by the most since April, outpacing a decline in imports that reflected cheaper petroleum.
A stagnant Europe and weaker economies in emerging markets such as China may be starting to sap demand for U.S. products, a source of strength for the expansion in the second quarter. At the same time, a rebound in crude oil prices may lead to a higher American import bill.
Deficit estimates of the 74 economists in the Bloomberg survey ranged from $39.7 billion to $47.1 billion U.S. The Commerce Department revised the trade shortfall for June from an initially reported $42.9 billion U.S.
Adjusting for changes in prices, the figure used in the calculation of gross domestic product, the trade deficit widened to $46.5 billion U.S. from $44 billion U.S. a month earlier.
Reflecting the global slowdown, today’s figures showed the U.S. posted a record $29.4-billion U.S. trade shortfall with China. The deficit with the European Union surged 42% to $12 billion U.S., the widest since October 2007. American exports to Germany were the weakest since February 2010.
Overall U.S. imports declined 0.8% to $225.3 billion U.S. from $227.1 billion U.S. in the prior month, reflecting a drop in the value of inbound deliveries of crude oil to $25.8 billion from $26.4 billion U.S. The cost of a barrel of crude decreased to $93.83 in July from $100.13 U.S.
Capital goods imports dropped by $553 million U.S. in July due to declines in shipments of computers, industrial machines and aircraft.
U.S. Exports
Exports decreased 1% in July to $183.3 billion U.S. as American companies shipped fewer automobiles, metals and consumer goods abroad.
Before July, U.S. exports were holding up, rising to a record $185.2 billion U.S. in June. A narrower trade deficit contributed 0.32 percentage points to the 1.7% pace of economic growth in the second quarter, according to Commerce Department figures.
