The U.S. trade deficit in goods narrowed in June amid a broad decline in imports, but the improvement was probably insufficient to prevent trade from again subtracting from economic growth in the second quarter.<\/p>\n
The report from the Commerce Department on Tuesday also showed exports dropping to a five-month low, pulled down by a sharp decline in shipments of industrial supplies, which include petroleum. The decrease likely reflected a pullback in crude oil prices amid a fragile ceasefire between the U.S. and Iran.<\/p>\n
With businesses ramping up investment in artificial intelligence, last month\u2019s drop in imports is probably temporary. The AI build-out is heavily dependent on imports. The government on Monday reported a strong increase in orders and shipments for non-defense capital goods in June.<\/p>\n
\u201cOur model mapping the trade data onto the national accounts now points to net trade subtracting around one percentage point from second-quarter GDP growth,\u201d said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.<\/p>\n
The goods trade gap contracted 4.2 per cent to US$101.5-billion last month, the Commerce Department\u2019s Census Bureau said. Economists polled by Reuters had forecast the goods deficit at US$100.0-billion. The goods trade deficit average for the three months through June remained wider than the first-quarter average.<\/p>\n
Broad decline in imports<\/p>\n
Goods imports decreased US$8.2-billion to US$306.2-billion. They increased 16.6 per cent on a year-on-year basis in June. The decline in monthly imports likely reflected the fading boost from businesses rushing to restock to avoid shortages and higher prices due to the Middle East conflict. <\/p>\n
Consumer goods imports led the decline, with a 3.8-per-cent drop. Imports of capital goods fell 2.0 per cent, but surged 37.4 per cent year-on-year. Food imports decreased 2.5 per cent, while those of automotive vehicles dropped 2.5 per cent. Industrial supplies imports fell 1.9 per cent, likely reflecting lower oil prices.<\/p>\n
Exports of goods fell US$3.8-billion to US$204.7-billion last month. Exports of industrial supplies tumbled 4.4 per cent, also likely a function of lower crude prices. Food exports dropped 3.1 per cent, while shipments of capital goods fell 1.1 per cent.<\/p>\n
But exports of automotive vehicles jumped 5.1 per cent and those of consumer goods increased 3.2 per cent. The government is scheduled to publish its advance estimate of second-quarter gross domestic product growth on Thursday. <\/p>\n
A Reuters survey of economists estimates the economy grew at a 2.1-per-cent annualized rate last quarter, which would match the first quarter\u2019s pace. Trade has subtracted from GDP for two straight quarters. Some of the anticipated drag from trade could be offset by robust business investment in equipment and an expected pickup in consumer spending. Inventories, which have been drawn down for four straight quarters, remain a wild card.<\/p>\n
The Census Bureau report showed wholesale inventories increased 0.3 per cent in June, matching May\u2019s gain. Stocks at retailers were unchanged after rising 0.5 per cent in May, though inventories at motor vehicle and parts dealers increased 0.4 per cent.<\/p>\n
Excluding motor vehicles and parts, retail inventories fell 0.2 per cent. This component goes into the calculation of GDP.<\/p>\n","protected":false},"excerpt":{"rendered":"The U.S. trade deficit in goods narrowed in June amid a broad decline in imports, but the improvement…\n","protected":false},"author":2,"featured_media":831637,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-831636","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/831636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=831636"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/831636\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/831637"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=831636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=831636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=831636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}