US trade deficit shrinks in July, raising hopes of 3d-quarter growth
WASHINGTON - The US trade deficit narrowed more than forecast in July as exports climbed to a record, offering a bright spot for an economy at risk of a bigger slowdown.
The gap shrank 13.1 percent, the most since February 2009, to $44.8 billion from a revised $51.6 billion shortfall in June, Commerce Department figures showed yesterday. Exports rose as companies shipped more capital goods and autos overseas.
Jobless claims unexpectedly rose last week and consumer sentiment waned, indicating the biggest part of the economy will struggle to gain momentum through the end of the year, separate reports showed.
“The July trade numbers suggest trade could boost growth in the third quarter,’’ said Scott Brown, chief economist at Raymond James & Associates Inc. Still, “the risks still seem to be tilted to the downside with the best-case scenario being growth just muddles along. Job growth is pretty lackluster at this point.’’
First-time applications for unemployment benefits rose last week, a sign the labor market is struggling to gain traction. Jobless claims climbed by 2,000 to 414,000 in the week ended Sept. 3, Labor Department figures showed. The monthly average climbed to the highest since mid-July.
After eliminating the influence of prices to render the figures used in calculating gross domestic product, the trade deficit narrowed to a three-month low of $45.3 billion from $50.3 billion.
The number was less than the $47.3 billion deficit averaged in the second quarter, indicating trade may provide a boost to the economy.
“The slowdown in the global economy may not be as great as we thought a few months ago, which certainly is encouraging,’’ said Millan Mulraine, senior US strategist at TD Securities in New York.
Exports increased 3.6 percent to $178 billion in July, boosted by sales of telecommunications equipment, civilian aircraft, autos, and industrial engines. US shipments of capital goods and autos and parts to overseas customers were the highest on record.
Imports fell 0.2 percent to $222.8 billion from $223.4 billion in the prior month.