The US trade deficit in July 2024 rose sharply to $78.8 billion, its highest level in the past two years, according to a report published by Bloomberg.
This figure represents an increase of 7.9% compared to the previous month, according to data from the US Department of Commerce.
This increase is driven by a significant increase in imports, as American companies try to secure their supplies in anticipation of a possible port workers strike, according to the same source.
Impact of deficit on the economy
Bloomberg data indicates that this large deficit in goods and services will negatively affect the US GDP, especially after the second quarter of 2024 witnessed the largest negative impact from trade on the economy since the beginning of 2022.
Imports increased by 2.1% to their highest level since March 2022, while exports increased by 0.5%.
Despite the slight growth in exports, imports were the main driver of the trade deficit in July, according to Bloomberg data.
The largest increase in imports included industrial products, capital goods, and consumer goods. In contrast, vehicle exports declined, which limited the total value of exports.
The trade deficit with China increased significantly, reaching $27.2 billion, the highest level since September 2022, while US imports from China rose by 11.3%, recording their highest level since October 2022.
Worrying data for the markets
With this increase in the trade deficit, the United States may face additional challenges in maintaining the stability of its economy. Bloomberg notes that the increased demand for imports, especially with the approaching holiday season, may lead to increased pressure on domestic companies to meet market needs.
In this context, some forecasts indicate that the trade deficit may continue to widen in the coming months, especially if challenges related to supply chains and concerns about the global economy persist.
This deficit is also affecting the US financial markets, as investors are increasingly concerned about its impact on economic growth. Given these figures, some expect the US government to take measures to deal with this deficit through economic policies aimed at boosting exports and limiting imports.
Deeper analysis of imports and exports
- Total imports of goods and services rose by 2.1%, while exports increased by 0.5%.
- The goods trade deficit with China reached $27.2 billion, the highest since 2022.
- The inflation-adjusted trade deficit was $97.6 billion, indicating continued inflationary pressures.
Bloomberg expects that continued high imports, especially ahead of the holiday shopping season and the possibility of port strikes, will increase pressure on the US economy.
