U.S. trade deficit in goods narrows for third straight month in June

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The numbers: The US trade deficit in goods narrowed 5.6% to $98.2 billion in June, according to the Commerce Department’s advanced estimate released Wednesday.

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After jumping in May, the deficit has narrowed for three straight month. This is the smallest deficit since November.

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Economists polled by Econoday were looking for the deficit to narrow only slightly to a $103.2 billion deficit.

Key details: Exports of goods rose $4.4 billion to $181.5 in June. Imports fell $1.5 billion to $279.7 billion.

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The data is not adjusted for inflation. The complete report on the international trade deficit, which will include inflation-adjusted data, will be released on Aug. 4.

According to the report, wholesale inventories were up 1.9% in June for the second straight month.

Retail inventories were up 2% after a 1.6% gain in May. Nonauto retail inventories were up 1.6%.

Big picture: Trade data has been volatile during the pandemic. Essentially, the US consumer has been the “buyer-of-last-resort” for world economy. With the International Monetary Fund warning the global economy might soon fall into a recession, trade activity might shrink with weaker activity impacting exports.

The narrowing of the deficit in June could provide a boost to second-quarter GDP growth, to be released Thursday.

Some economists are predicting a contraction in GDP in the second quarter, which would be the second straight negative quarterly print. That has been a common definition of a recession, although, as is the case with so much about the economy during the pandemic, many economists and Federal Reserve officials say “this time is different” and the US economy remains healthy.

Market reaction: Stocks DJIA,
-0.71%

SPX,
-1.15%
were set to open higher Wednesday on strong earnings reports.

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Credit: www.marketwatch.com /

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