The U.S. trade deficit shrank by 14 percent in July to $10.34 billion from $12.06 billion in June, thanks to a sharp contraction in imports, the Commerce Department said Thursday.
Imports fell in July by 4.6 percent to $47.42 billion, outweighing a second straight drop in exports, which were down 1.5 percent in July to $37.08 billion.
The decrease in exports reflected a drop in sales of autos, civilian aircraft, corn, coal, telecommunications equipment and diamonds.
On a quarterly basis, the trade figures are essentially flat, said Frederick Sturm, an economist with Fuji Securities Inc. of Chicago.
“The third quarter is getting off to a start with no great improvement,” he said, adding that exports currently are making no contribution to growth of gross domestic product.
For the first seven months of the year, the trade deficit is running at an annual rate of $114.8 billion, compared with $84.5 billion for all of last year. If this year’s trade performance finishes at the same pace, the deficit would be the worst since 1988.
