US trade deficit widens more than expected in July
America's shortfall in trade with the rest of the world widened at the start of the third quarter as exports of goods, mainly of civilian aircraft and soybeans declined.
The total foreign trade deficit on goods and services jumped from -$45.7bn for June to -$50.3bn in July, according to the Department of Commerce.
Economists had penciled-in a smaller increase to -$47.5bn.
Total exports fell by 1.0% month-on-month to reach $211.1bn, led by a $0.9bn drop in those of aircraft, together with a $0.7bn fall in those of soybeans, while imports grew by 0.8% versus June to reach $261.2bn.
Overseas purchases of computers rose by $0.5bn, those of industrial supplies by $0.5bn and those of automotive vehicles and parts by $0.5bn, while those of pharmaceutical preparations decreased by $1.3bn.
Separating foreign trade in goods from that in services, the deficit in the former widened by 0.6% over the month to reach -$73.1bn, while the surplus in services trade declined by under a tenth of a percentage point to $23.1bn, Commerce said.
For the year-to-date, the goods and services deficit grew by 7.0% or -$22.0bn versus the comparable period of 2017, with exports rising by 8.6% to $115.7bn and imports by 8.3% to $137.7bn.
Commenting on Wednesday's figures, Andrew Hunter at Capital Economics said: "A lot could change over the next couple of months, but real exports are on course to be broadly unchanged in the third quarter overall, with imports rising by around 6% to 8% annualised. The upshot is that net trade looks set to subtract a bit more than 1%-pt from annualised GDP growth in the third quarter.
"That isn't actually as bad as we previously thought, however, although the recent surge in the dollar suggests that trade may end up being a modest drag in the fourth quarter too. But for now, with domestic demand holding up well, GDP growth looks set to remain unusually strong in the third quarter at between 3.0% and 3.5% annualised."