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International Trade: Uptick in Exports

September 2, 2016
Bottom Line: The trade deficit narrowed moderately in July with exports increasing modestly. On a trend basis, the trade deficit has still been widening since 2013. The July level for real trade balance for goods is moderately below its Q2 levels, suggesting a positive contribution to the Q3 GDP.

The International Trade Deficit NARROWED by $5.2 billion to $39.5 billion in July, compared with market expectations for an increase to a $41.5 billion deficit. Meanwhile, the prior month's deficit was revised slightly higher from 44.5 billion to 44.7 billion. For the first 7 months of the year, the trade deficit has averaged $41.4 billion, slightly below from the average of $41.5 billion for the same period in 2015.

Exports ROSE by 1.9% to $186.3 billion after an increase of 0.8% in the prior month. The declines in other goods and capital goods were more than offset by increases in food, feed, and beverages and industrial supplies and materials. Export growth is now 2.0% BELOW their year ago level.

Imports FELL by 0.8% to $225.8 billion after an increase of 1.9% in the prior month. The declines in consumer goods and capital goods were partially than offset by increases in industrial supplies and materials and food, feed, and beverages. In July, oil imports decreased. Oil imports year-to-date are now moderately below the 2015 year-to-date levels. Imports are now 1.8% BELOW their year ago level.
Article by contingentmacro