The U.S. trade deficit in goods declined in June for the first time this year amid a broad rebound in exports, contracting 2.5 percent to $96.8 billion, the Department of Commerce‘s Census Bureau revealed recently.
Exports rose 2.5 percent to $172.3 billion due to a 4.9 percent rise in shipments of food. Meanwhile, capital goods exports rose 3.6 percent along with a sharp increase in exports of industrial supplies and crude oil. Motor vehicles and parts in addition to consumer and other goods exports also rose in June. Exports have been hampered by slower global demand and a strong dollar as the Federal Reserve has kept interest rates higher, impacting the U.S. trade deficit this year.
Consumer goods imports rise
Imports of goods rose 0.7 percent to $269.2 billion. Consumer goods imports rose 3.3 percent, reflecting solid domestic demand. Meanwhile, capital goods imports gained 2.6 percent, signaling better business spending on equipment. Imports of other goods also rose 2.7 percent but imports of industrial supplies, food and motor vehicles declined.
Inventories pick up
The Census Bureau’s June report also revealed that wholesale inventories increased 0.2 percent in June after gaining 0.6 percent in May. Retail inventories rose 0.7 percent, supported by a 1.8 percent rise in stocks at motor vehicles and parts dealers. Meanwhile, retail inventories increased by 0.6 percent in May. Excluding motor vehicles and parts, retail inventories rose 0.2 percent in June after declining 0.1 percent in May.
Read: Beijing foreign trade volume hits record-high $256.61 billion in H1 2024
Impact on Q2 GDP
Business inventories are estimated to have added around 1.5 percentage points to GDP growth last quarter after subtracting from growth for two straight quarters. This quarter, however, the impact on the U.S. GDP from the trade deficit will likely be offset by a rise in inventories at wholesalers and retailers in June.
The government will publish its second-quarter GDP growth, which will likely reveal a pick-up in activity due to an increase in consumer spending in June.
For more news on logistics, click here.
