US June Goods Trade Deficit Narrows to $101.5 Billion as Imports Fall for First Time Since January

The US goods trade deficit narrowed again in June as imports declined, though it still topped $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, dragged down by weaker shipments of industrial supplies. Goods imports dropped 2.6%, or $8.2 billion, to $306.2 billion, the first decline since January, as capital-goods purchases eased after months of gains fueled by surging artificial intelligence investment.

In recent months, the trade deficit had been narrowing as exports increased on stronger demand for US petroleum products tied to the Iran war. Imports also rose as US companies bought materials needed for AI buildouts.

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 had a large effect on export swings over the past year. Exports of consumer goods and autos, both volatile categories, rebounded.

Imports of capital goods, including computers and accessories, semiconductors and telecommunications equipment, fell for the first time since September. Even so, they remained 37.4% higher than a year earlier. Consumer-goods imports also declined.

The US is scheduled to release its advance estimate of second-quarter gross domestic product on July 30. Economists surveyed by Reuters expect the economy to have grown at an annualized 2.1% pace in the second quarter, unchanged from the first.

Trade was a drag on GDP for a second straight quarter. Still, business spending on equipment tied to AI investment was likely a key driver of US economic growth in the second quarter.

Kim Jung-a, contributing reporter, Hankyung.com, kja@hankyung.com