US trade deficit yawns wider in July amid jump in technology imports

4th Sep 2024 14:08

(Sharecast News) - America's shortfall on trade with the rest of the world worsened as expected in July as outlays on imports surged.

According to the Department of Commerce, in seasonally adjusted terms the country's total trade deficit jumped by 7.9% month-on-month to reach -$78.8bn.

Economists had forecast -$79.0bn of red ink.

Imports of goods and services rose by 2.1% versus June, hitting $345.4bn, while exports were up by 0.5% to $267bn.

Imports of capital goods were especially strong, rising by $3.3bn, led by a $2.4bn increase in those of computer accessories.

Overseas purchases of industrial supplies and materials meanwhile were up $2.8bn, including $1.1bn of nonmonetary gold.

Year-to-date, the total trade deficit had widened by 7.7% or $36.2bn in comparison to a year earlier

By countries, it was the goods deficit with China that widened the most in July, registering a monthly increase of $4.9bn to reach $27.2bn.

Thomas Ryan at Capital Economics said the worsening in America's net trade was "hardly cause for concern" as it reflected strong imports and thus domestic demand.

In turn, that would appear to contradict any recession fears, he added.

When adjusted for inflation, imports were ahead by a very strong annualised 11%, against a 5% gain in real exports.

"That is in line with our prior expectations, so our tracking of third-quarter GDP growth - based on the hard data - remains at 2.5% annualised."