In July, the U.S. trade deficit expanded to $78.8 billion, the largest since mid-2022, according to the Department of Commerce. This represents a 7.9% increase from the revised $73.0 billion deficit in June, driven by imports rising faster than exports.
Imports grew by 1.7% to $316.7 billion, fueled by higher demand for consumer goods like automobiles and industrial supplies. U.S. companies also increased imports ahead of a potential dockworker strike and the upcoming holiday season, leading to one of the busiest months for the ports of Los Angeles and Long Beach. Exports, meanwhile, rose by 1.6% to $237.9 billion, with gains in industrial supplies and capital goods, though motor vehicle exports declined.
On an inflation-adjusted basis, the trade deficit reached $97.6 billion, the largest since June 2022. This widening gap reflects strong consumer spending in the U.S. and slower global demand for American goods, which may negatively impact third-quarter economic growth as trade deficits tend to reduce GDP.
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