The U.S. trade deficit fell in July to its smallest amount in six months as exports increased to a record high, the government reported Thursday, supporting views of solid economic growth in the third quarter.
The Commerce Department said the trade deficit fell 0.6 percent to $40.5 billion, the lowest since January. June’s trade deficit was revised to $40.8 billion. Economists expected the July deficit to increase to $42.2 billion.
Exports rose 0.9 percent to a record high of $198 billion in July, supported by a jump in automobiles, parts, and engines, as well as non-petroleum products.
Imports rebounded 0.7 percent in July to $238.6 billion after dropping the previous month. The rebound in imports signals underlying strength in domestic demand. The increase in imports was driven by food and autos, both of which hit record highs.
Petroleum imports fell, causing the petroleum deficit to hit its lowest level since May 2009. A domestic energy boom has seen the United States reduce its dependence on foreign oil.
The politically sensitive trade deficit with China rose to its highest level on record in July.