The U.S. trade deficit widened sharply in July from a month earlier, beating analysts’ expectations, driven primarily by a larger increase in imports, both in percentage terms and in value terms, according to data released Wednesday by the Commerce Department. The deficit on trade in goods and services with the rest of the world rose to $78.8 billion in July, up 7.9 percent from June, as imports rose more than exports.
The deficit increased slightly more than anticipated by the markets, which were rather expecting it to reach $78.5 billion, according to the consensus published by briefing.com. Over a year, the increase in the deficit is 7.7%, or $36.2 billion, also specified the Commerce Department, still due to a more marked increase in imports than exports, a sign that American household consumption remains sustained.
Exports increased by $1.3 billion over the month, mainly due to an increase in sales of semiconductors but also goods and services to the government, which offset a decline in sales of passenger vehicles and raw materials, particularly precious stones. On the import side, the increase was $7.1 billion compared to June and mainly concerned goods, primarily computer equipment as well as raw materials for industry, with the tourism sector, however, slightly down.
The geographical distribution of the deficit remains broadly unchanged, with regard to goods, the largest still concerning China, at 27.2 billion dollars, up sharply over one month, due to a drop in exports combined with an increase in imports. The European Union remains once again in second position, with a US trade deficit of 18.4 billion dollars, which is still concentrated in the same four countries: Germany, Ireland, Italy and France. Conversely, the United States still has a trade surplus with the Benelux. Finally, Mexico and Vietnam complete the top 4 of the main trade deficits, with however for the first time in many months a decline concerning that with Vietnam, while that with Mexico remains almost stable.
