US Trade Gap Lower than Expected


The trade deficit in the United States widened slightly to USD 43.7 billion in July of 2017, following a downwardly revised USD 43.5 billion gap in June. It compares with market expectations of a bigger USD 44.6 billion shortfall. Exports declined 0.3 percent and imports fell at a slower 0.2 percent. The trade gap with China reached an 11-month high and the one with the EU was the highest in 8 months.

The July increase in the goods and services deficit reflected a fall in the goods deficit of less than USD 0.1 billion to USD 65.3 billion and a decrease in the services surplus of USD 0.2 billion to USD 21.6 billion.

Total exports fell 0.3 percent from the previous month to USD 194.38 billion. Exports of goods decreased USD 0.4 billion to USD 128.6 billion, mainly due to lower sales of consumer goods (USD -0.7 billion); cell phones and other household goods (USD -$0.5 billion); automotive vehicles, parts, and engines (USD -0.6 billion) and passenger cars (USD -1.0 billion). On the other hand, sales rose for capital goods (USD 0.9 billion) and civilian aircraft (USD 1.1 billion). 

Exports of services decreased USD 0.1 billion to USD 65.8 billion as travel (for all purposes including education) went down USD 0.3 billion. Other business services, which includes research and development services; professional and management services; and technical, trade-related, and other services, increased USD 0.2 billion.

Total imports fell 0.2 percent to USD 23.81 billion. Purchases of goods decreased USD 0.5 billion to USD 193.9 billion, mainly due to lower imports of automotive vehicles, parts, and engines (USD -0.8 billion); passenger cars (USD -0.8 billion); industrial supplies and materials (USD -0.7 billion) and crude oil (USD - 1 billion). On the other hand, imports rose for capital goods (USD 1.3 billion); computer accessories (USD 0.6 billion) and computers (USD 0.6 billion). 

Imports of services increased less than USD 0.1 billion to USD 44.1 billion. The changes in all categories were $0.1 billion or less and nearly offsetting.

On a non-seasonally adjusted basis, exports fell to Canada (-13.9 percent), Mexico (-7.6 percent), the EU (-9.8 percent) and OPEC (-7.1 percent) but rose to China (3.5 percent), Japan (2.3 percent) and Brazil (7.5 percent). Imports went down from Canada (-11.5 percent), Mexico (-9.7 percent), the EU (-3.7 percent), the OPEC (-12.6 percent) and Brazil (-3.5 percent) but rose from China (3.1 percent) and Japan (3 percent). 

The US trade deficit widened with China (USD -33.56 billion from USD -32.58 billion in June), the EU (USD -13.45 billion from USD -12.47 billion), Japan (USD -5.77 billion from USD -5.57 billion) and Canada (USD -1 billion from USD -0.46 billion) but narrowed with Mexico (USD -4.92 billion from USD -5.96 billion).

Year-to-date, the goods and services deficit increased USD 27.9 billion, or 9.6 percent, from the same period in 2016. Exports increased USD 76.8 billion or 6 percent and imports went up at a faster USD 104.8 billion or 6.7 percent.


US Trade Gap Lower than Expected


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
9/6/2017 1:02:41 PM