U.S. Trade Deficit Widens in July, but Balance Normalizing on Trend

Source: Economics Group of Wells Fargo Bank, N.A. Summary The U.S. trade deficit widened after upward revisions to past data leave the balance narrower in recent months. Trade flows continue to normalize, and the early read on Q3 GDP is that net exports will provide a modest boost to headline growth. Trade Flows are Slowing U.S. trade flows continue to come back to earth after pandemic-related disruptions. The overall trade balance widened by $1.3 billion to -$65.0 billion in July, but that comes after large upward revisions leave the balance narrower over the past few months. Revisions help bring the monthly data in line with quarterly net exports in the GDP accounts, which previously suggested a larger drag from trade in Q2. Despite the overall narrowing, the trade balance is now about 37% smaller than at its widest point in March 2022. That said, even as flows are normalizing, as seen in the nearby chart, the deficit remains wider than it was pre-pandemic. READ FULL ARTICLE >>