US foreign trade narrows in June as imports dip

America's shortfall on trade in goods with the rest of the world shrank more quickly than expected last month, as imports slipped.

According to the Department of Commerce, in seasonally adjusted terms the international trade deficit in goods narrowed in June at a month-on-month pace of 5.6%, from roughly -$104.0m to -$98.2bn.

Economists had penciled-in a decline to -$102.9bn.

Exports jumped by 2.5% in comparison to May hitting $181.5bn, while imports dipped by 0.5% to $279.7bn.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said that the trade figures, when combined with stronger-than-expected wholesale and retail inventory data which were released alongside should see economists revise their projections for second quarter GDP growth.

Shepherdson raised his own forecast from a quarterly annualised rate of -1.2% to -0.5%, but cautioned that the trade figures had been boosted in part by higher prices for industrial supplies, which include oil, and not volumes.

Import growth however remained "very elevated" when compared to the prior trend as a result of inventory building between October and March, which was now over, such that "imports still need to fall a long way to return to trend".

Barclays Research's fourth quarter US GDP tracker on the other hand was unchanged after the data, pointing to a 0.4% drop in quarterly annualised terms.