WASHINGTON (dpa-AFX) - Reflecting an increase in exports and a modest decrease in imports, the Commerce Department released a report on Wednesday showing the U.S. trade deficit narrowed in the month of July.
The Commerce Department said the trade deficit narrowed to $54.0 billion in July from a revised $55.5 billion in June.
Economists had expected the deficit to narrow to $53.5 billion from the $55.2 billion originally reported for the previous month.
The narrower trade deficit came as the value of exports climbed by 0.6 percent to $207.4 billion in July after plunging by 1.9 percent to $206.2 billion in June.
A jump in drug exports contributed to the rebound along with increases in exports of capital goods and automotive vehicles, parts, and engines.
On the other hand, the report said the value of imports edged down by 0.1 percent to $261.4 billion in July after tumbling by 1.7 percent to $261.8 billion in the previous month.
Imports of computers showed a significant decrease, while imports of petroleum products showed a notable increase.
'The slight narrowing in the trade deficit in July was driven by a rise in exports and leaves net trade on track to be nothing worse than a small drag on GDP growth in the third quarter,' said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, 'But we doubt that will be sustained over the rest of the year given the continued downturn in global demand and the further rise in tariffs last month.'
The Commerce Department also said the goods deficit narrowed to $73.7 billion in July from $75.3 billion in June, while the services surplus also dipped to $19.7 billion from $19.8 billion.
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