The Commerce Department said on Friday June Trade Deficit widened to $44.5 billion, a 10-month high fueled by weak exports and domestic demand. Economists were looking for the deficit to widen to $43.1 billion, while May’s deficit was revised lower to $40.96 billion.
The 8.7% increase is the largest single month gain since August 2015 and June was the third straight month of measured increases in the U.S. trade deficit. When adjusted for inflation, the deficit rose to $64.7 billion from $60.9 billion in May.
The government report on second-quarter gross domestic product released last week claimed trade had contributed two-tenths of a percentage point to the 1.2% annualized growth rate, which will now be revised. While exports of goods and services gained 0.3% in June, imports of goods and services increased 1.9% to $227.7 billion in June.
The U.S. trade deficit China was again fueled by imports far exceeding exports, making the trade deficit 2.5% larger to $29.8 billion in June, the biggest gap since last November. Exports to the European Union shot up by 7.8%, with imports skyrocketing 18.2%.