June 2015 Trade Deficit

America’s trade imbalance worsened as the second quarter of 2015 came to a close according to the Bureau of Economic Analysis.  The total shortfall in June was $43.8 billion, up $2.9 billion versus the previous month.  Year-to-date, the deficit increased $1.6 billion or 0.6 percent from the same period in 2014.

Two components make up this indicator and both worsened from May.  America imported $232.4 billion in June, $2.8 billion more than a month earlier.  Exports deteriorated; foreign countries bought $188.6 billion for American made goods and services, $100 million less that in the prior period.  America’s goods deficit increased $2.9 billion to $63.5 billion while our services surplus decreased nearly $100 million.

By country, the outcomes were mixed.  America’s trade shortfall with China increased by $1.0 billion.  The chasm with Europe widened by $2.0 billion, but it narrowed with Japan.  Our gap with Mexico expanded $1.5 billion.  Unfortunately, America’s trade surplus with Canada in May was short lived as the balance fell back into the red with a deficit of $2.5 billion.

This indicator seems to reflect the state of the global economy.  America is the largest and one of the quickest growing economies in the world, and this is being reflected in our nation’s growing trade imbalance.  However, Atlas worries about America’s ability to keep the rest of the world’s economies afloat.  Our growth rate is slow relative to other expansions.  Only time will tell how much longer our economy can continue to shoulder the largest share of the burden.  (by C. Cox)