The U.S.’s deficit in merchandise trade swelled to the second-largest on record last month as imports climbed to pre-pandemic levels, buoyed by demand for automotives.
The overall deficit grew to US$79.3 billion in July from a revised US$71 billion in June, according to Commerce Department data released Friday. The median projection in a Bloomberg survey of economists called for a US$72 billion shortfall in July, and the reading was bigger than all except one of 37 estimates. The biggest gap was recorded in December 2018, at US$79.5 billion.
Exports increased 11.8 per cent from June to US$115 billion, the highest since March. Imports rose by the same measure to US$194.3 billion, it said. That was the most since February.
The monthly gain in exports was led by a 44 per cent surge in automotive-vehicle shipments. Industrial supplies, such as oil, rose 7.1 per cent and capital goods, which include factory machinery and parts, jumped 7.5 per cent. Foods, beverages, and animal feed were up 2.1 per cent from June. Overall, exports are 15.9 per cent are lower than a year earlier.
“Global and U.S. demand continue to face a long and risky path towards recovery, so we see trade struggling to continue to regain ground quickly,” James Watson and Gregory Daco, economists at Oxford Economics, wrote in a note.