July 2017 Trade Deficit

America’s trade deficit widened a little in July according to the Bureau of Economic Analysis.  Growing $200 million to $43.7 billion from the revised tally of $43.5 billion (originally $43.6 billion), our nation’s trading shortfall gave back a portion of the prior month’s $2.8 billon improvement.  Nonetheless, America continues to import much more that it exports. 

July’s deterioration was actually caused by services.  Our nation runs a consistent surplus in this category, but it fell 0.8 percent to $21.6 billion.  On the other side of the ledger, America’s goods deficit remained unchanged at $65.3 billion. 

Both imports and exports declined in the period.  America imported 0.2 percent less than in June.  Falling prices and shrinking volume for petroleum purchases caused the import value of this energy source to fall $900 million.  Fewer foreign autos, declining $800 million, were purchased as well.   Additionally, procurements from trading partners selling industrial supplies fell $700 million.  Exports fell 0.3 percent with consumer goods declining $700 million; auto exports represented $600 million of this total fall.

Trade deficit data in July are mixed.  On one hand, it is encouraging to see the shortfall hold steady instead of growing.  But on the other hand, the composition of the ledger’s change is not optimal.  With both imports and exports falling, it suggests global trading hit a slight snag in the period.  While this iteration of the trade data could be good for America’s GDP (because it is not subtracting a greater value from the other parts of our economy), one cannot help but wonder why global trade slowed.  As always, not too much can be made from a single month’s report, so Atlas waits anxiously for the August tally.