U.S. Trade Deficit Narrows Significantly Amid Declining Imports
The U.S. trade deficit in goods reached a nearly two-year low in June as imports sharply declined, signaling potential growth in the economy's second quarter. The unexpected contraction in the trade gap might lead economists to upgrade GDP estimates, despite a slowdown in domestic demand, according to new reports.
The U.S. trade deficit in goods shrank to its lowest level in almost two years during June, as reported by the Commerce Department. A significant drop in imports played a crucial role, aligning with economists' forecasts that trade would largely drive a predicted recovery in economic growth for the second quarter.
Following a surge in import activities in the year's first quarter due to businesses preempting tariff hikes, the recent decline in imports highlights dwindling domestic demand. The Trump administration's trade agreements might offer relief, aiding imports and exports to stabilize in the upcoming year, some economists noted.
According to the latest report, the trade gap in goods fell 10.8% to $86 billion, contradicting economist predictions of an increase to $98.20 billion. While imports of consumer goods plummeted, capital goods imports noted a slight rise. The government plans to reveal preliminary GDP figures Wednesday, with expectations of a 2.4% economic rebound.
(With inputs from agencies.)
Google News