July Trade Balance

America’s trade deficit widened slightly in July according to the Bureau of Economic Analysis. The trading shortfall totaled $39.1 billion which follows June’s revised gap of $34.5 billion (initially tallied as $34.2 billion). Exports fell 0.6 percent in the period while imports increased 1.6 percent; both of these components had moved in the opposite direction respectively in June.

America’s goods deficit widened while its services surplus closed. The nonpetroleum goods deficit expanded to $38.7 billion in July from June’s tally of $35.0 billion; this was the largest contributor to the increased trade gap. Petroleum’s deficit ticked up $1.2 billion to $18.7 billion. Services’ surplus was somewhat smaller than in June, falling to $19.4 billion from $19.5 billion a month earlier.

The trade deficit’s trend has been improving since January 2012 when it was $51.4 billion. This month’s slight deterioration is not alarming but may illustrate some of the difficulties the global economy is experiencing; on both sides of the ledger, firms were less willing to spend money on capital goods. Domestic firms spent $300 million less on foreign made capital expenditures; foreign firms cut their spending on American made wares by $1.6 billion. This may point to a diminishing outlook by companies worldwide. (by C. Cox)