U.S. Trade Deficit Surges, Impacting Economic Growth Projections
The U.S. trade deficit in goods widened significantly in July due to a sharp increase in imports, potentially impacting economic growth in Q3. The gap rose 22.1% to $103.6 billion. Goods imports increased while exports slightly dipped, affecting the GDP growth estimates for the upcoming quarter.
- Country:
- United States
The U.S. trade deficit soared in July, as imports climbed significantly, casting a shadow over the anticipated economic growth for the third quarter. The Commerce Department announced on Friday that the goods trade gap expanded by 22.1% to $103.6 billion.
Driven by an $18.6 billion rise in goods imports to a total of $281.5 billion, the deficit overshadowed a minor $0.1 billion dip in exports, now at $178.0 billion. Previously, a reduction in import flows had contributed to a robust 4.95 percentage point GDP growth in Q2.
The economy grew at a 3.3% annualized rate last quarter, rebounding from the earlier 0.5% contraction noted in Q1. Initial economic contrasts were attributed to anticipatory imports preceding the Trump administration's tariffs. The Atlanta Federal Reserve projects a 2.2% GDP growth for Q3.
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