US June Goods Trade Deficit Narrows to $101.5 Billion as Imports Post First Drop in Five Months

The US goods trade deficit narrowed again in June as imports fell, though it remained above $100 billion.

The Commerce Department said July 28 that the June goods trade gap shrank 4.2% to $101.5 billion. Economists had forecast a $100 billion deficit.

Goods exports fell 1.8%, or $3.8 billion, to $204.7 billion as shipments of industrial supplies declined. Goods imports dropped 2.6%, or $8.2 billion, to $306.2 billion, the first decrease since January, as capital-goods purchases eased after months of gains driven by heavy artificial intelligence investment.

In recent months, the trade deficit has been narrowing as exports increased on stronger demand for US petroleum products during the Iran war, while imports also rose as US companies bought materials needed to build out AI infrastructure.

Exports of industrial supplies, a category that includes crude oil and petroleum products, fell 4.4% in June. The category also includes nonmonetary gold, which has been a major source of volatility in export data over the past year. Exports of consumer goods and autos rebounded.

Imports of capital goods, including computers and accessories, semiconductors and communications equipment, fell for the first time since September. Even so, they were still up 37.4% from a year earlier. Imports of consumer goods also declined.

The US is due to release its advance estimate of second-quarter gross domestic product on July 30. A Reuters survey of economists forecast annualized growth of 2.1% in the second quarter, matching the first-quarter pace.

Trade was a drag on GDP for a second straight quarter. But business spending on equipment linked to AI investment, which also contributed to the trade deficit, was likely a key growth driver for the US economy in the second quarter as well.

Kim Jeong-a, guest reporter, Hankyung.com, kja@hankyung.com