The numbers: The U.S. international trade deficit in goods narrowed 4.4% to $87.8 billion in June, according to the Commerce Department’s advanced estimate released Thursday.
Economists polled by Econoday were looking for the deficit to remain broadely unchanged at a $91.8 billion deficit.
The advanced trade data is expressed in nominal terms, meaning it is not adjusted for inflation.
Key details: Exports of goods inched up by $400 million to $162.5 billion in June. Imports fell $3.6 billion to $250.3 billion.
Industrial supplies and capital goods led the decline in imports, which offset a rise in autos, said Matthew Martin, U.S. economist at Oxford Economics.
Big picture: Despite the improvement in June, the trade sector subtracted slightly from second-quarter growth. Imports are trending lower as U.S. consumers are spending more on services than goods.
What are they saying? “Overall, trade flows have come off record levels and the latest data are signaling weaker demand for imports,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
“We expect trade to be broadly neutral [for GDP] over the balance of the year. The weakening in the dollar, which impacts exports with a lag, may provide some support in the months ahead, but we expect the weakening global economic backdrop to be the more determinant factor,” said Miller of Oxford.
Market reaction: U.S. stocks
DJIA,
