U.S. trade deficit narrows in June as exports rise faster than imports
The overall U.S. trade deficit narrowed in June as exports rose faster than imports, the U.S. Commerce Department reported Wednesday.
U.S. exports rose by 9.4 percent to 158.3 billion U.S. dollars in June while imports increased by 4.7 percent to 208.9 billion dollars, the department said. Overall trade deficit declined by 7.5 percent to 50.7 billion dollars from a revised 54.8 billion dollars in May.
“Although exports rebounded more, causing the overall trade deficit to narrow, imports are just 15.2% off their pre-virus February level compared to over 25% for exports,” Shannon Seery, an economist at Wells Fargo Securities, wrote Wednesday in a note.
“This report signals activity began to recover in June, but as COVID cases have re-accelerated domestically and abroad the question remains to what extent the rebound progresses,” Seery wrote, expecting a continued albeit modest recovery in the third quarter barring renewed lockdowns.
The narrowing trade deficit came after the department reported last week that the U.S. economy contracted at an annual rate of 32.9 percent in the second quarter of the year, the steepest decline since the government began keeping records in 1947.
While the U.S. economy is likely to rebound in the third quarter, economists are warning that a recent resurgence in COVID-19 cases across the country will undermine public confidence, dampen consumer spending and investment, and weigh on the fragile recovery nationwide.