MW: U.S. trade gap shrinks to $44.8 billion in July
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — The trade deficit the United States runs with the rest of the world shrank in July, according to data released Thursday, as record exports helped offset the biggest trade gap with China in 10 months.
The Commerce Department said the trade deficit narrowed to a seasonally adjusted $44.8 billion in July from $51.6 billion in June, a decline of 13.1% — the largest percentage decline since February 2009. Economists polled by MarketWatch had expected a $51 billion deficit.
Downward revisions to the nation’s trade deficits for April, May and June could mean the final reading of second-quarter gross domestic product being revised upward from 1%.
For the first seven months of the year, the U.S. trade gap has been $329.8 billion, wider than the $291.7 billion seen over the same interval during 2010.
In July, the U.S. exported a record $178 billion, up by $6.2 billion from June, led by industrial supplies and materials, capital goods and the highest-ever export of automotive vehicles, parts and engines.
By contrast, the U.S. imported $222.8 billion during the month, which was marginally lower than the $223.4 billion in June but still near highs of the year.
The decline came down to oil, as petroleum imports shrank, as oil prices fell to $104.27 a barrel in July from $106 a barrel in June and as Americans used 4% less imported energy products.
The U.S. also imported a record amount of capital goods, again demonstrating the trend of strong business investment, while the U.S. imported the highest amount of automotive vehicles, parts and engines since February 2008, as the availability of models from earthquake-struck Japan improved.
The $27 billion deficit with China was the highest since September 2010. The U.S. and China have long clashed over the latter’s methods of keeping its currency, the renminbi, weak. The Obama administration has pressed China to boost the value of its currency but declined to name the country a currency manipulator, a policy opposed by Republican presidential hopeful Mitt Romney.
For the year to date, the U.S. trade gap with China has been $160.4 billion, 10% worse than the same period of 2010.
Exports to South and Central America of $14.7 billion, however, were the largest on record in July, on demand from Brazil, Argentina and Chile, helping the U.S. trade balance with the region turn positive.
Separately, the Labor Department said Thursday that weekly U.S. jobless claims rose to 414,000 from 412,000.
Steve Goldstein is MarketWatch's Washington bureau chief.
