U.S. Trade Deficit Drops 7% to $41.5 Billion in June
According to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, the U.S. trade deficit decreased by 7% to $41.5 billion in June, down from $44.7 billion in May. June exports reached $195.9 billion while imports decreased $2.9 billion from May to $240.3 billion. However, “The goods and services deficit increased $5.0 billion from June 2013 to June 2014. Exports were up $5.5 billion, or 2.9 percent, and imports were up $10.5 billion, or 4.6 percent.”
Compared to May of this year, June exports of other goods, and foods, feeds, and beverages decreased. For the same month, exports of consumer goods, automotive vehicles, parts, and engines, and industrial supplies and materials increased. June imports of consumer goods, automotive vehicles, parts, and engines, industrial supplies and materials, and capital goods decreased while imports of foods, feeds, and beverages increased.
Imports of capital goods, consumer goods, automotive vehicles, parts, and engines, foods, feeds, and beverages, other goods, and industrial supplies and materials increased for June 2014 when compared to June 2013.
According to Fox Business, “The economy expanded at a 4 percent annual rate during the second quarter after shrinking 2.1 percent in the first three months of the year.” This could be explained by low consumer spending and the subsequent trade volumes during the wintry start to 2014. Also, “a domestic energy boom has seen the country reduce its dependence on foreign oil, helping to ease pressure on the current account deficit. In June, the petroleum deficit fell to its lowest level since May 2009.”
The U.S. recorded a trade surplus with Hong Kong, Australia, Singapore, and Brazil. Deficits were recorded with China, European Union, Japan, Germany, Mexico, OPEC, Ireland, Canada, Saudi Arabia, South Korea, and India. While U.S. exports to China increased by 1.4 percent, imports from China increased by 3.7 percent, reaching a deficit of $30.1 billion. Interestingly, U.S. exports to Canada achieved an all-time high in June.