US Trade Deficit Falls in July
Drop comes as deficits with China and Western Europe climb to record levels
WASHINGTON, DC - 09/10/04 - The US trade deficit fell almost 9% in July to $50.15 billion in July, according to figures released today by the US Department of Commerce (DOC).
Despite the fact that the drop in the deficit followed a 16.9% surge the previous month that had pushed the trade gap to a record $55 billion, the new figure ranks as the second highest monthly deficit imbalance on record.
Overseas sales of goods and services rose by a solid 3% during the month to $95.86 billion, "reflecting strong gains in shipments of autos and auto parts, civilian aircraft and computers," the DOC said.
Shipments of US-grown farm products actually fell by 0.5% during the month to $4.47 billion, led by declines in export shipments of soybeans and wheat.
The volume of imports, which had risen for 10 straight months, decreased slightly, falling 1.4% to $146 billion - the second highest level of imports on record.
The decline, the DOC said, reflects a 9.4% drop in imports of crude oil and other petroleum products, which fell $13.75 billion.
According to the new figures, the US deficit with China hit a new monthly record of $14.9 billion in July, leaving the imbalance with that country so far this year a full 28% above last year's level.
The US deficit with China hit $124 billion last year, the largest imbalance ever reported with a single country.
In addition to China, the DOC said, the US also set a deficit record with Germany, an imbalance of $4.3 billion, while the trade deficit with all of Western Europe rose to $11.1 billion, the second highest level on record.
The trade figures with the US' North American Free Trade Agreement partners also improved slightly in July with the deficit with Canada - the US' largest trading partner - dropping slightly to $6.11 billion, compared to $6.58 billion in June and Mexico falling $3.54 billion, compared to $4.9 billion in June.
Even with the slight narrowing in July, the trade deficit through the month is running at a record total annual rate of $581 billion, a figure that analysts say puts the deficit on track to outstrip last year's all-time high deficit of $496.5 billion.
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