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International Trade: Exports Fall As Expected

September 5, 2018
Bottom Line: After stronger exports this Spring due to front-running of tariff increases, exports fell in July, as we started to see in June data and mostly as expected. The trend stayed steadily in the direction of wider deficits throughout the tariff front-running and is now accelerating moderately wider. Finally, the July level for real trade balance for goods is moderately above its Q2 levels, suggesting a negative contribution to the Q3 GDP.

The International Trade Deficit WIDENED by $4.3 billion to $50.1 billion in July, compared with market expectations for an increase to a $50.2 billion deficit. For the first 7 months of the year, the trade deficit has averaged $48.3 billion, modestly above from the average of $45.1 billion for the same period in 2017.

Exports FELL by 1.0% to $211.1 billion after a decline of 0.7% in the prior month. The declines in capital goods and food, feed, and beverages were partially offset by increases in industrial supplies and materials and motor vehicles and parts. Export growth is now 8.2% ABOVE their year ago level.

Imports ROSE 0.859% to $261.2 billion after an increase of 0.7% in the prior month. The declines in consumer goods and were more offset by increases in capital goods and other goods. In July, oil imports increased. Oil imports 2018 year-to-date levels are now moderately below the 2017 year-to-date levels. Imports are now 9.1% ABOVE their year ago level.