MNI DATA ANALYSIS: US July Trade Gap Widened To $50.1b>

--Census Goods Gap $72.0b Vs $72.2b Advance Estimate

By Kevin Kastner, Shikha Dave, and Harrison Clarke

     WASHINGTON (MNI) - The U.S. international trade gap widened to 

$50.1 billion in July from $45.7 billion, a slightly wider gap than the 

$50.0 billion deficit expected and the largest monthly increase since 

March 2015, data released by the Commerce Department Wednesday morning 

showed. 

     The overall July trade gap was much wider than the second quarter 

average, as was the census goods gap and the chained trade gap, so if 

the trade gap does not narrow in August or September, net exports could 

be a large drag on third quarter growth. 

--RECORD TRADE GAPS WITH CHINA, EU

     Also of interest, the trade gaps with China and the EU both hit 

record high levels in July, ammunition for those in favor of further 

tariffs. The gap with Canada also widened this month, while the gap with 

Mexico narrowed, but both were wider than a year ago. 

     The unadjusted bilateral trade gap with China widened to a record 

high $36.8 billion in July from $33.5 billion in June and $33.6 billion 

a year ago. At the same time, the gap with the EU widened to a record 

$17.6 billion from $11.7 billion in June. 

     The gap with Canada widened to $3.1 billion from $2.0 billion in 

June, while the gap with Mexico narrowed to $5.5 billion from $7.4 

billion. 

--CENSUS GAP REVISED SMALLER

     The revised Census goods gap reported Wednesday was slightly 

smaller than the advance estimate of $72.2 billion, coming in at $72.0 

billion after $67.9 billion in June and a $66.7 billion average in the 

second quarter. 

     The overall BOP goods gap widened to $73.1 billion from $68.9 

billion in June, while the services surplus narrowed very slightly to 

$23.1 billion. 

     The chained goods gap widened to $82.5 billion from $79.3 billion 

in June, and is larger the $77.5 billion average for the second quarter, 

a negative factor for third quarter GDP. 

     The petroleum gap widened to $4.5 billion in July from $4.2 billion 

in June, with import growth larger than export growth. The nonpetroleum 

goods gap widened to $67.5 billion from $63.7 billion. 

--EXPORTS FALL, IMPORTS RISE

     Exports declined in July, with a $0.9 billion fall in foods, feeds, 

and beverages, a $0.9 billion drop in capital goods ex autos on a $1.6 

billion decline in civilian aircraft orders, and a $0.4 billion decline 

in consumer goods. These were offset by increases in industrial supplies 

and automotive vehicles, parts, and engines. 

     Imports increased in July, with a $0.7 billion rise in capital 

goods ex autos, a $0.5 billion rise in industrial supplies, as well as 

increases of $0.3 billion and $0.5 billion in foods, feeds, and 

beverages and automotive vehicles, respectively. These were offset by a 

$0.8 billion decline in consumer goods imports, specifically 

pharmaceutical preps. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$]