Export Surge Causes a Drop in the June Trade Deficit

The US trade deficit shrank in June as exports surged to a record high $191 billion, while imports shrank by almost $6 billion to $225 billion. According to figures released yesterday by the Department of Commerce, the trade deficit for the month reached $34.2 billion, or almost 23 percent lower compared to the $44.1 billion in May, which recorded the lowest trade deficit since October 2009.

The May to June increase in exports reflected an increase in industrial supplies and materials of $1.5 billion; capital goods, $1.5 billion; consumer goods, $1 billion; food products, animal feed, and beverages, $0.3 billion; and other goods $0.3 billion. Leading the export list were aircraft engines,  telecommunications equipment, heavy machinery and farm goods with US made automotive vehicles, parts and engines seeing a decrease of $0.4 billion in the overseas sales during the month.
On the imports side, the 2.5 percent May to June decrease in imports of goods reflected decreases in industrial supplies and materials, $2.5 billion; consumer goods, $1.6 billion; ‘other goods,’ $1.2 billion; food products, animal feed, and beverages, $0.4 billion; and automotive vehicles, parts, and engines $0.3 billion. The volume of capital goods imports was virtually unchanged, while oil imports declined to their lowest level in more than two years.
US service exports in June increased $0.1 billion from the previous month. The increase was mostly accounted for by an increase in travel and tourism, $0.1 billion. Grow in other service categories such as consulting, architectural and engineering, legal, and financial were relatively small. Service imports were virtually unchanged from May to June. A $0.1 billion decrease in the ‘other transportation’ sector, which includes freight and port services, was mostly offset by increases of less than $0.1 billion in several other categories.
The June trade figures show surpluses with Hong Kong, Australia, Brazil and Singapore, with deficits recorded with China, the European Union, Japan, Germany, Mexico, Saudi Arabia, Korea, Canada, Ireland, Venezuela and India.
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