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The U.S. trade deficit fell 4% in June to $65.5 billion due to declining imports, reflecting a shift in consumer spending habits as well as a slump in global manufacturing.
The trade gap dropped $2.8 billion from $68.3 billion in May.
Big picture: Big changes in the trade deficit often reflect disruptions in the U.S. or world economies.
Falling imports, for example, appear concentrated in manufacturing. American and foreign manufacturers — aside from automakers — have suffered a drop in demand amid a shift in consumer spending toward services and away from goods.
U.S. imports of goods have tumbled 13% from a record high in March 2022.
Exports have fallen not quite as much.
The U.S. has benefited from a rebound in tourism, which counts as an export, as well as strength in other services such as finance.
Smaller deficits are a positive for gross domestic product, but they aren’t always indicative of the health of the U.S. economy.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to decline in Tuesday trades.
Read the full article here
