Trade Deficit Deepens Sharply

The nation's trade deficit deepened sharply in July, to $50.1 billion vs a revised $45.7 billion in June. The deficit in goods jumped to $73.1 billion from $68.9 billion in June while the surplus in services slipped slightly to $23.1 billion.

Exports of capital goods fell $1.0 billion to $46.3 billion with civilian aircraft down $1.6 billion to $3.5 billion in the month. Exports of foods & feeds fell $0.9 billion to $13.2 billion with exports of consumer goods down $0.4 billion to $16.0 billion.

The import side shows a $0.8 billion decline in consumer goods to $52.6 billion with other components, however, on the rise including capital goods up $0.7 billion to $58.2 billion and autos up $0.5 billion to $30.7 billion.

The bilateral deficit with China deepened to $36.8 billion in unadjusted country data with the EU at a deficit of $17.6 billion. The deficit with both Japan and Mexico came in at $5.5 billion in July and Canada at $3.2 billion.

July's deficit is much deeper than the $45.6 billion monthly average for the second quarter and points to a major uphill battle for net exports in the third-quarter GDP report.