US trade deficit lowest in five months

The US trade deficit with the rest of the world fell to a five-month low in July, official figures show.

It declined 7.4% to $41.9bn, compared with $45.2bn in June, the US Commerce Department said.

The trade deficit represents the difference between the value of what the US exports to the rest of the world and what it imports.

Exports rose 0.4% to $188.bn, helped by stronger global sales of US cars. Imports fell 1.1% to $230.4bn.

For much of the year, the US trade deficit has been about 3.6% higher than the previous year as a result of lower export sales.

Some in the US remain concerned that economic growth will be hurt by further declines in exports as a result of a stronger dollar and continued overseas weakness in the world’s second-largest economy, China.

Sal Guatieri, senior economist at BMO Capital Markets, forecast trade would continue to drag on US economic growth over the next year. He added a stronger dollar would harm exports and boost demand for imports by making foreign goods cheaper for US consumers.