Reflecting a jump in exports and a modest decrease in imports, the Commerce Department released a report on Thursday showing the U.S. trade deficit narrowed by more than expected in the month of June.
The report showed the trade deficit narrowed to $79.6 billion in June from a revised $84.9 billion in May. Economists had expected the trade deficit to shrink to $81.9 billion from the $85.5 billion originally reported for the previous month.
The U.S. trade deficit has narrowed significantly since reaching a record high of $107.7 billion in March. The deficit for June is the smallest since it hit $78.9 billion in last December.
The decrease in the size of the trade deficit came as the value of exports surged by 1.7 percent to $260.8 billion in June after jumping by 1.5 percent to $256.5 billion in May.
Exports continued to advance as a spike in the value of exports of industrial supplies and materials more than offset a decrease in exports of capital goods, including civilian aircraft.
Meanwhile, the report showed the value of imports edged down by 0.3 percent to $340.4 billion in June after falling by 0.6 percent to $341.4 billion in May.
A notable decrease in imports of automotive vehicles, parts and engines more than offset increases in imports of capital goods and industrial supplies and materials.
“The outlook for trade flows is now more balanced given a material slowdown in import growth while exports have maintained stronger than expected resilience despite rising economic headwinds abroad,” said Mahir Rasheed, US Economist at Oxford Economics.
He added, “With the Fed poised to move policy into restrictive territory in the coming months, and inflation remaining elevated through year end, we expect the ongoing slowdown in the economy to further arrest trade flows in the second half of 2022.”
The report also showed the goods deficit narrowed to $99.5 billion in June from $104.4 billion in May, while the services surplus widened to $19.9 billion from $19.5 billion.
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