The U.S. economy is projected to surge by more than 2 percent in the second quarter.
The U.S. trade deficit in goods narrowed in June as imports declined, fueling expectations of a sharp second-quarter GDP rebound.
The international goods trade gap declined by nearly 11 percent, or $10.4 billion, to $86 billion, according to new Commerce Department data released on July 29.
In May, the U.S. goods trade deficit increased to a slightly downwardly adjusted $96.4 billion.
The consensus forecast suggested a $98.4 billion trade deficit for June, with economists expecting further stabilization in trade flows following the upheaval in worldwide trade flows in April.
Goods imports fell by 4 percent, totaling $264.2 billion last month. Exports of goods for June were little changed at $178.2 billion.
Market watchers are paying closer attention to imports as they will likely be a substantial factor in the coming quarterly GDP reports. Imports are subtracted from gross domestic product calculations since they measure the value of goods and services produced domestically.
In the first quarter, the U.S. economy contracted by 0.5 percent, largely due to a surge in imports and a modest decline in government spending. As companies tried to get ahead of President Donald Trump’s tariffs by front-running their purchases of foreign goods, net exports trimmed close to 5 percentage points from the GDP in the first three months of the year.
In addition to merchandise trade numbers, which are not adjusted for inflation, estimates indicate that advanced retail inventories totaled $808.7 billion, representing a 2.5 percent increase from the same period last year. Advance wholesale inventories also jumped 1.5 percent year over year to $907.7 billion.
In today’s economic climate, private inventory levels are another crucial metric, as they can influence GDP measurements and potentially signal shifts in consumer demand.
Ultimately, recent estimates anticipate a rebound in growth prospects.
According to the Atlanta Federal Reserve’s GDPNow Model, the economy is expected to grow at a rate of 2.4 percent in the second quarter.
The Bureau of Economic Analysis will release the first GDP estimate for the April–June period on July 30.
By Andrew Moran
