Shipping Shipyard Containers Trade International Supply Port © Bianco Blue Dreamstime

US Trade Deficit Shrinks in July as Demand Surge Ebbs

Sept. 3, 2021
Goods exports rose $2.7 billion while goods exports fell $2.9 billion last month.

The U.S. trade deficit fell in July for the first time in three months, the Commerce Department said Thursday, as the vaccine-fueled surge in American consumer demand ebbed and exports picked up.

The trade deficit was $70.1 billion in July, according to the report, 4.3% lower than the previous month's downwardly revised figure and a bigger drop than analysts expected.

Imports fell very slightly to $282.9 billion, while exports picked up 1.3% to $212.8 billion, in what Mahir Rasheed of Oxford Economics described as trade flows reverting after the United States' vaccine-fueled spring bounceback.

"We expect the deficit to narrow further as foreign consumption gains momentum and domestic demand decelerates," he said in an analysis. 

"The pandemic will continue to pose a downside risk to trade flows, but we expect a gradual normalization in trade dynamics as vaccinations increase and supply disruptions slowly ease."

The decline in the overall goods and services deficit was fueled by a drop of $5.5 billion in the goods deficit to $87.7 billion, while the services surplus fell $2.4 billion to $17.7 billion.

Compared to July 2020, when the pandemic had badly hit global commerce and American consumer demand, the deficit was 37.1%, or $131 billion, higher.

Services exports increased marginally while goods exports made up the bulk of the overall jump, with capital goods seeing a $1 billion increase, while consumer goods and automobiles and parts rose by smaller amounts.

Goods made up most of the decline in imports, with consumer goods falling $2.1 billion and industrial supplies dropping $1.7 billion even as cars and parts rose $1.1 billion. 

However services imports increased by $2.4 billion, with travel rising $1 billion and intellectual property charges, which included rights to broadcast the 2020 Summer Olympic Games, gaining $0.9 billion.

Copyright Agence France-Presse, 2021

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

How Organizations Connect and Engage with Frontline Workers

June 14, 2023
Nearly 80% of the 2.7 billion workers across manufacturing, construction, healthcare, transportation, agriculture, hospitality, and education are frontline. Learn best practices...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!