Published: Sat, September 09, 2017
Economy | By Melissa Porter

US Trade Deficit Widens Less than Anticipated in July

US Trade Deficit Widens Less than Anticipated in July

The trade gap reached $43.7 billion in July, up from $43.5 billion in June, the Commerce Department said Wednesday.

At the same time, imports of meat and vegetables increased, pushing agricultural imports in July to $11.7 billion, the highest on record.

Prices for longer-dated U.S. Treasuries rose, while stocks on Wall Street were trading mostly higher.

During the January to July period, total trade deficit of the country was Euro 1.2 billion versus Euro 1.5 billion deficit in the same period of 2016.

The trade deficit fell to Euro 300 million in July from Euro 334 million in the corresponding month of the previous year.

Some economists have warned that Hurricane Harvey could significantly impact trade volumes and commodity prices, and increase the trade deficit in September.

When adjusted for inflation, the trade deficit increased to $61.6 billion from $60.8 billion in June.

Last month the US government reported that trade had contribute 0.2% to the USA economy's 3% annualized pace of growth for the second quarter. Imports of crude oil, computers, telecom equipment, and autos increased during that period.

A larger trade deficit typically translates into slower US growth, because it means Americans are buying more goods from overseas than from the U.S. But shipments overseas of civilian aircraft jumped by $1.1 billion and exports of telecom equipment, aircraft parts, and industrial machinery rose.

The so-called real goods deficit in July was below the second-quarter average of $62.4 billion. That ongoing deficit has grabbed the attention of President Donald Trump, who has blamed it for helping to decimate USA factory jobs as well as stunting US economic growth.

On Saturday, Trump also threatened to withdraw from a free trade deal with South Korea.

In addition, petroleum exports were $10.2 billion, which was the highest level since November 2014.

Exports, meanwhile, fell 4.9 percent to Can$44.1 billion.

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

Exports to China were up 3.5%, while exports to the European Union fell by 9.8%.

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