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US: International Trade in Goods (Advance)
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Balance | $-100.0B | $-106.6B to $-94.7B | $-118.8B | $-101.5B | $-101.4B |
| Imports - M/M | 3.7% | -2.6% | -2.4% | ||
| Exports - M/M | -2.9% | -1.8% |
Highlights
A rebound in imports combined with lower exports widened the US international trade in goods deficit to $118.8 billion in July from $101.4 billion in June, larger than the $100.0 billion gap expected by forecasters in an Econoday survey.
Against the backdrop of ongoing global uncertainty around trade tariffs and the dragging war in the Middle East, exports of goods fell a further 2.9 percent in July after contracting 1.8 percent in June, led by an 11.2 percent drop in industrial supplies. Exports of food, feeds, and beverages declined 1.4 percent and autos were down 0.7 percent. This was partly offset by an 8.1 percent increase in consumer goods.
Goods imports, by contrast, rebounded 3.7 percent after decreasing 2.4 percent in June, led by an 11.3 percent increase in capital goods. Consumer goods imports edged up just 0.1 percent after contracting 3.5 percent in June.
Market Consensus Before Announcement
The trade gap is expected almost flat at $100 billion in July versus $101.5 billion in June.
Definition
This monthly report offers advance import and export data on the goods components of the monthly trade report. Goods make up roughly two-thirds of the nation's exports and roughly three-quarters of imports.
Description
Changes in the levels of imports and exports, along with the difference between the two (the trade balance), are valuable gauges of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the dollar in the foreign exchange market.
Imports indicate demand for foreign goods here in the United States. Exports show foreign demand for U.S. goods. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States, since this trade imbalance creates greater demand for foreign currencies.
Market reaction to this report is complex. Typically, the smaller the trade deficit, the more bullish it is for the dollar. Also, stronger exports are bullish for corporate earnings and the stock market. Like most economic indicators, the trade balance is subject to substantial monthly variability, especially when oil prices change.
It is also useful to examine the trend growth rates for exports and imports separately because they can deviate significantly. Trends in export activity reflect both the competitive position of American industry and the strength of domestic and foreign economic activity. U.S. exports will grow when: 1) U.S. product prices are lower than foreign product prices; 2) the value of the dollar is relatively weaker than that of foreign currencies; 3) foreign economies are growing rapidly.
Imports will increase when: 1) foreign product prices are lower than prices of domestically-produced goods; 2) the value of the dollar is stronger than that of other currencies; 3) domestic demand for goods and services is robust.