U.S. advance goods trade deficit narrows slightly in July

The U.S. advance goods trade balance came in at a deficit of USD 72.3 billion in July, narrowing from June’s deficit of USD 74.2 billion. Nominal goods exports rose 0.8 percent sequentially, slightly above expectations, as exports of capital goods, automotive vehicles, and consumer goods outweighed small declines in remaining categories.

Elsewhere, nominal imports dropped 0.4 percent sequentially. Imports of industrial suppliers rose 2.1 percent sequentially in July, partially retracing June’s 7.2 percent fall, but capital goods imports dropped 2.5 percent in the month, on the back of a 0.5 percent fall in June.

“Altogether, the import data pushed our tracking estimate for equipment spending in Q3 lower by enough to offset the positive effect on GDP from a narrower-than-expected goods balance. Hence, one potential take-away from the July goods trade balance report is that it appears business remains hesitant to engage in spending”, said Barclays.

Moreover, nominal exports and imports dropped 1.9 percent and 1.2 percent year-on-year, respectively. It seems that U.S. trade volumes remained weighed down by the slowdown in global growth and trade policy uncertainty.