The US trade deficit in goods saw a significant reduction in June, hitting its lowest level in nearly two years as imports experienced a sharp decline. This development has reinforced economists’ expectations that trade will substantially contribute to an anticipated rebound in economic growth for the second quarter. According to the Commerce Department’s Census Bureau, the goods trade gap narrowed by 10.8 per cent to $US86.0 billion ($132 billion) last month, marking the lowest level since September 2023. This is compared to Reuters’ polled economists’ forecast of a rise to $US98.20 billion.
Imports of goods decreased by $US11.5 billion, or 4.2 per cent, reaching $US264.2 billion, the lowest level since March 2024. Consumer goods imports led the decline, plummeting by 12.4 per cent. Conversely, goods exports slipped by $US1.1 billion, or 0.6 per cent, to $US178.2 billion, primarily due to an 8.1 per cent drop in exports of industrial supplies. The government is scheduled to release its advance estimate of second-quarter GDP on Wednesday (Thursday AEST).
In related economic news, a separate report from the Labor Department’s Bureau of Labor Statistics revealed that job openings, a key indicator of labour demand, decreased by 275,000 to 7.437 million by the end of June. The accommodation and food services industry experienced the most significant decline, with 308,000 fewer vacancies. The job openings rate fell to 4.4 per cent from 4.6 per cent in May, while hiring declined by 261,000 to 5.204 million.
Additionally, The Conference Board’s gauge of confidence rose 2 points to 97.2. A Bloomberg survey of economists had forecast a median reading of 96. Expectations for the next six months climbed to 74.4, the highest since February, while a gauge of present conditions fell to a three-month low.
