In July, the U.S. trade deficit widened from nearly a low of four years, as exports cooled off and imports made a rebound.
The gap widened by 13.3% from $34.5 billion to $39 billion. Forecasters had predicted the gap would widen to $38.5 billion. During July, Americans bought auto imports at a record level and more gasoline.
An increase in business and consumer demand domestically would most likely prompt companies in the U.S. to keep the same purchases from its trading partners during the third quarter.
During the same period, slower growth globally might weigh on U.S. exports as European and China markets struggle to gain more momentum.
Futures on the stock market extended their earlier losses following the report.
Survey estimates ranged from deficit of $34.8 billion to as high as $42.4 billion. The jump by 13.3% in the gap amounted to the largest since January of 2011 and followed a contraction in June of 21%, which suggest the trend is at some point in between the two. The June and July readings are the smallest consecutive readings since late in 2009.
Imports were up 1.6% in July to $228.5 billion. The U.S., during July imported over $32.5 billion in products related to petroleum, which was the most since last October.
Purchases by consumers of engine, parts and autos jumped to $26.4 billion, the highest ever.
Exports dropped by 0.6% in July to $189.5 billion from June’s $190.4 billion, which was a jump from May of 2.2%.
The reading in July was the second highest ever. The July reduction reflected less capital goods purchases, including engines and airplanes and consumer items like jewelry.
The shortfall in trade, excluding petroleum increased in July to $20.4 billion from June’s $17.2 billion.
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