The International Trade in Goods report shows a widening trade gap. Both exports and imports rose for the month but the gap widened more than any Bloomberg Econoday economist’s estimate.

Trade Gap Widens to -$63.3 Billion

Trade Gap 2016-07A

Highlights

Exports of goods improved in June though imports rose even more, making for a $63.3 billion goods deficit in the month. The mix will pull down tomorrow’s second-quarter GDP report, where exports are a subtraction, but nevertheless is a welcome sign of strength in cross-border demand.

Exports rose 0.9 percent led by gains for foods and for consumer goods. Exports of capital goods, which have been weak, posted a solid monthly gain, also at 0.9 percent. The import side shows a big gain for industrial supplies where price inflation for oil is at play but also a 1.2 percent gain for capital goods imports and a second very strong gain for the leading component, consumer goods which rose 3.3 percent following May’s 2.7 percent. Gains in imports of consumer goods point to business confidence in consumer demand.

Advance Economic Indicators

Starting today, the Commerce Department will release an Monthly Advance Economic Indicators Report. In addition to the balance of trade, it also includes Advance Wholesale and Retail Inventories.

Advance conomic Indicators 2016-07A

Advance International Trade in Goods

The international trade deficit was $63.3 billion in June, up $2.2 billion from $61.1 billion in May. Exports of goods for June were $120.2 billion, $1.1 billion more than May exports. Imports of goods for June were $183.5 billion, $3.3 billion more than May imports.

Advance Wholesale Inventories

Wholesale inventories for June, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $589.3 billion, virtually unchanged (±0.4 percent) from May 2016, and virtually unchanged (±1.6 percent) from June 2015. The April 2016 to May 2016 percent change was unrevised at up 0.1 percent (±0.2 percent).

Advance Retail Inventories

Retail inventories for June, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $604.2 billion, an increase of 0.5 percent (±0.2 percent) from May 2016, and were up 5.6 percent (±0.7 percent) from June 2015. The April 2016 to May 2016 percent change was unrevised at up 0.5 percent (±0.2 percent).

Mike “Mish” Shedlock