US trade deficit contracts in June

The US trade deficit narrowed 5.6% to $73.3 billion in June, but economists warn the trend may not be sustained due to strong domestic demand.

The U.S. ​trade deficit narrowed ​in June, but ‌the trend ​is unlikely to be sustained amid strong domestic demand ‌that is being satiated with imports. The trade shortfall contracted 5.6% to $73.3 billion, the Commerce Department's Bureau ‌of Economic Analysis and Census Bureau said on ‌Tuesday. Economists polled by Reuters had forecast the deficit at $73.0 billion.

The government reported last week that the trade ⁠deficit widened ​further ⁠in the second quarter, subtracting a full percentage point from ⁠gross domestic product. The economy grew at a 1.5% ​annualized rate last quarter, though domestic demand, driven ⁠by consumers and business ramping up spending on artificial ⁠intelligence ​infrastructure, increased at its fastest pace since the first quarter of 2023.

Imports dropped ⁠1.8% to $388.0 billion in June. Goods imports fell 2.5% to $309.0 ⁠billion. ⁠Exports slipped 0.9% to $314.7 billion. Goods exports declined 1.9% to $206.9 billion. (Reporting ‌By ‌Lucia Mutikani; Editing by ​Andrea Ricci)