August 6, 2024
The trade deficit narrowed by $1.9 billion in June to $73.1 billion after having widened by $0.5 billion in May t it has been gradually widening since the beginning of the year in response to the stronger dollar.
Exports rose $3.9 billion or 1.5% in June to $265.9 billion. They have been gradually climbing for the past year. During that period of time exports have risen by 5.9%%
Imports rose $2.0 billion in June or 0.6% to $339.0 billion. In the past year imports have risen 7.3%. Consumer spending has been strong, and imported goods are cheaper for Americans to buy given the strength of the dollar.
The best gauge of global trade flows is the change in the total of both exports and imports. It, has risen 6.7% during the course of the past year.
The trade deficit in real terms narrowed by $2.5 billion in June to $91.4 billion. The trade component subtracted 0.7% from GDP growth in the second quarter.
Stephen Slifer
NumberNomics
Charleston, SC
Hi Steve,
I’m a bit confused, has the deficit increased so sharply as a result of overall reduced economic activity? Or is there some other factor at play here? Material costs? or? This seems surprising with the general weakness of the dollar.
Best,
Hi Chris what we are have seen in the recent trade data as well as what happened to trade in the first few months of the year were wildly distorted by the recession and subsequent rebound. The dramatic narrowing of the trade gap earlier did not mean a lot. Nor does the recent rebound. I guess the only point I was trying to make is that the increases in both exports and imports tells us nothing more than the rebound is underway with the recovery in the U.S. currently outpacing the rest of the world.
Ah, that makes sense.
Thanks