WASHINGTON (dpa-AFX) - With the value of imports spiking, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened more than expected in the month of July.
The Commerce Department said the trade deficit shot up to $78.3 billion in July from a revised $59.6 billion in June. Economists had expected the trade deficit to increase to $75.7 billion from the $60.2 billion originally reported for the previous month.
The wider trade deficit came as the value of imports surged by 5.9 percent to $358.8 billion in July after plunging by 3.6 percent to $338.7 billion in June.
The report showed a sharp increase in imports of industrial supplies and materials, particularly nonmonetary gold, as well as a jump in imports of capital goods.
'While imports bounced back in July, more than half of the increase was due to gold as trade policy and safe-haven demand brought about a resurgence in trade,' said Matthew Martin, Senior U.S. Economist at Oxford Economics. 'Excluding gold, imports rose by a more modest 3.3%.
He added, 'It's early in the quarter, but the risk is that trade does not provide as large of a boost to Q3 GDP if imports remain resilient.'
Meanwhile, the Commerce Department said the value of exports rose by 0.3 percent to $280.5 billion in July after slipping by 0.3 percent to $279.7 billion in June.
Modest increases in exports of capital goods and automotive vehicles, parts and engines were partly offset by dips in inventories of industrial supplies and materials and other goods.
The report also said the goods deficit widened to $103.9 billion in July from $85.7 billion in June, while the services surplus narrowed to $25.6 billion in July from $26.6 billion in June.
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