Deficit jumps 24.4% from prior month to $88.6 billion; capital goods imports post biggest monthly gain since 1993

Containers are stacked at the Port of Los Angeles. [AFP]
Containers are stacked at the Port of Los Angeles. [AFP]

The US Commerce Department said Thursday (local time) that the country's goods and services trade deficit widened 24.4 percent from the prior month to $88.6 billion in July.

The figure came in slightly below the $90 billion consensus forecast compiled by Dow Jones.

Exports fell 2.1 percent from the previous month to $310.7 billion. The industrial supplies and materials category led the decline, with crude oil exports dropping $4.5 billion and non-monetary gold falling $3.9 billion.

Imports, meanwhile, rose 2.8 percent to $399.3 billion. Capital goods drove the increase, particularly computers and semiconductors. Computer imports jumped $6.9 billion, computer accessories $6.6 billion and semiconductors $1.2 billion.

Capital goods imports as a whole surged $14.4 billion, or 11.4 percent, from the prior month — the largest single-month increase since 1993.

Bloomberg attributed the surge to soaring demand for advanced equipment among US companies racing to build out global AI infrastructure.

By trading partner, the largest bilateral deficits in July were with Mexico ($27.5 billion), Vietnam ($23.3 billion), Taiwan ($18.1 billion), China ($15.2 billion), South Korea ($10.4 billion) and the EU ($8.9 billion).

However, the cumulative US trade deficit for January through July fell 29.6 percent compared with the same period a year earlier, suggesting the overall trade imbalance has been easing.


mokiya@heraldcorp.com