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July U.S. International Trade Deficit Dips Slightly

U.S. international trade in goods and services in July showed a slight deficit improvement from June, with growth in exports outpacing an increase in imports, new data from the U.S. Census Bureau and U.S. Bureau of Economic Analysis show.

The data project a continuing trend in deficit improvement, and increases in exports are helping drive demand for jobs domestically.

Exports in July were up $1.8 billion from June, to $198 billion, while imports rose $1.6 billion to $238.6 billion, the government data released Sept. 4 show. The July goods and service deficit totaled $40.5 billion, down from $40.8 billion in June.

The U.S. government report comes only two weeks after Census Bureau issued an interim final rule to amend its regulations to reflect changes related to International Trade Data System implementation, whose purpose is both for cost savings from international trade and to bolster border security. “This new electronic system will speed up the shipment of American-made goods overseas, eliminate often duplicative and burdensome paperwork, and make our government more efficient,” the White House noted in a statement.

Goods trade trends

In terms of goods trade, the July increase in exports compared with the previous month reflected boosts in various trade categories, including automotive vehicles, parts, and engines, up $1.7 billion; industrial supplies and materials, up $1.3 billion million; and capital goods, up $400 million. Decreases occurred in consumer goods, down $600 million, and foods, feeds, and beverages, down $600 million decrease. Other goods were virtually unchanged, the government statistics show.

Looking at annual trends, the $8.1 billion increase (4.3 percent) in year-over-year exports of goods and services reflected increases in automotive vehicles, parts and engines, up $2.8 billion; capital goods, up $1.5 billion; consumer goods, up $700 million; other goods, up $500 million; foods, feeds, and beverages, up $300 million; and industrial supplies and materials, up $100 million.

The June to July increase in imports of goods reflected increases in automotive vehicles, parts, and engines, up $1.4 billion; other goods, up $500 million; industrial supplies and materials, up $500 million; and foods, feeds, and beverages, up $100 million. Decreases occurred in consumer goods, down $500 million, and capital goods, down $300 million.

The year-over-year $9.2 billion increase (up 4 percent) in imports of goods and services reflected increases in capital goods, up $3.5 billion; automotive vehicles, parts, and engines, up $2.8 billion; foods, feeds, and beverages, up $1.3 billion; consumer goods, up $700 million; and other goods, up $500 million. A decrease occurred in industrial supplies and materials, down $600 million.

Services trade trends

Exports of services in July increased $100 million from June, reflecting lesser increases in several categories of services, the government data show.

Imports of services were virtually unchanged. A $100 million increase in other business services mostly was offset by a $100 million decrease in charges for the use of intellectual property caused by higher payments in for the rights to broadcast the 2014 soccer World Cup. Changes in the other categories of services imports were relatively small, according to the government data.

Year-over-year exports of services grew by $2.4 billion, or 4.2 percent. The largest increases were in travel (for all purposes including education), which rose by $1.0 billion; in transport, up $600 million, which includes freight and port services and passenger fares; in other business services, up $400 million; and in financial services, up $400 million.

A $700 million boost in travel (for all purposes including education) and a $500 million hike in other business services drove a $1.3 billion, or 3.5 percent, increase in year-over-year imports of services.

Three-month averages

For the three months ended in July, exports of goods and services averaged $196.8 billion, while imports averaged $238.4 billion, resulting in an average trade deficit of $41.6 billion. For the three months ended in June, the average trade deficit was $43.4 billion, reflecting average exports of $195.4 billion and average imports of $238.8 billion, the government data show.

The July figures show surpluses of $2.1 billion with Hong Kong ($3.1 billion for June), $1.6 billion with Australia ($1.3 billion), and $500 million with Brazil ($900 million).

Deficits were recorded with China, $30.9 billion ($30.1 billion in June); European Union, $13.2 billion ($11.2 billion); Germany, $6.4 billion ($5.2 billion); Japan, $6.2 billion ($5.4 billion); OPEC, $6.2 billion ($3.9 billion); Mexico, $4.4 billion ($4.9 billion); Canada, $3.1 billion ($2.7 billion); Saudi Arabia $2.8 billion ($1.9 billion); South Korea, $2.5 billion ($1.9 billion); Venezuela, $2.2 billion ($1.6 billion); India, $2.1 billion ($1.3 billion); and Ireland, $1.8 billion ($2.8 billion).

Advanced technology products exports were $27.1 billion in July, and imports were $34 billion, resulting in a deficit of $6.9 billion. July exports were $1.3 billion less than the $28.4 billion in June, while July imports were $1.8 billion less than the $35.8 billion in June, the government data said.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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