Sharp Drop in Imports Leads to Significant Narrowing in Trade Deficit in July

Source: Economics Group of Wells Fargo Bank, N.A.


  • The deficit in international trade in goods and services narrowed by more than $10 billion in July. The improvement was due largely to a continued decline in imports.
  • One-off factors associated with supply chain normalization and geopolitics are contributing to the sharp decline in the trade deficit in recent months.
  • Real exports of goods rose by 3.2% in July relative to the previous month, while real imports dropped 2.1%. Real net exports likely will boost real GDP growth significantly in the third quarter.