U.S. July trade deficit up 13.3% to $39.1 billion!!! Trade deficits with China, EU at record highs!

U.S. July trade deficit up 13.3% to $39.1 billion 8:30a
U.S. exports fall 0.6% in July to $189.4 billion 8:30a
U.S. imports in July rise 1.6% to $228.6 billion 8:30a
U..S. petroleum-product exports hit another record 8:30a
Trade deficits with China, EU at record highs 8:30a
U.S. trade deficit 10% lower vs. one year ago




Worse Than Expected US Trade Deficit Spikes In July, Trade Gaps With China, EU Rise To Record

When last week the revised Q2 GDP print was announced, which beat expectations solidly driven entirely by a surge in net exports, we said that “with China on the rocks and tightening, the Emerging Markets in free fall, and Europe still a net exporter (so not benefiting the US), anyone hoping this trade led-recovery will be sustainable, will be disappointed.” Sure enough, the first trade data update for the third quarter as of July, confirmed just this, as the trade deficit widenedfrom a revised $34.5 billion deficit, to a substantially larger monthly deficit, amounting to $39.1 billion. This was $500MM more than consensus expected, or $38.6 billion, and it means that as we predicted, the downward revisions to Q3 tracking estimates are about to start rolling in, trimming ~0.1%-0.2% from US GDP for this current quarter. Specifically, imports for the month rose from $225.1 billion to $228.6 billion while exports fell from $190.5 billion to $189.5 billion. But perhaps most notable is that in July, the US trade deficit with China and the EU rose to a record of $30.1 billion (from $26.6bn last month) and $13.9 billion (from $7.1bn) respectively.

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