U.S. Goods Trade Deficit Widens Sharply in July

The U.S. trade deficit in goods widened sharply in July as imports surged, suggesting trade could drag significantly on economic growth in the third quarter, Lucia Mutikani reported for Reuters.

A slowdown in imports last quarter led to a sharp contraction in the trade deficit, which added a record 4.95 percentage points to gross domestic product (GDP) growth during that period. (Photo: Port of Los Angeles Facebook) 

The goods trade gap jumped 22.1% to $103.6 billion last month, the Commerce Department’s Census Bureau said Friday. Economists polled by Reuters had forecast the deficit would rise to $89.45 billion.

Imports of goods climbed $18.6 billion to $281.5 billion, while goods exports dipped $0.1 billion to $178.0 billion.

A slowdown in imports last quarter led to a sharp contraction in the trade deficit, which added a record 4.95 percentage points to gross domestic product (GDP) growth during that period.

The economy grew at a 3.3% annualized rate in Q2, after contracting at a 0.5% pace in Q1, when businesses rushed to import goods ahead of President Donald Trump’s sweeping tariffs.

The Atlanta Federal Reserve is currently projecting GDP growth of 2.2% for the third quarter.