WASHINGTON (Reuters) -The U.S. trade deficit in goods contracted sharply in June amid a decline in imports, cementing economists’ expectations that trade likely accounted for much of an anticipated rebound in economic growth in the second quarter.
The goods trade gap narrowed 10.8% to $86.0 billion last month, the Commerce Department’s Census Bureau said on Tuesday. Economists polled by Reuters had forecast the goods trade deficit rising to $98.20 billion.
Imports of goods decreased $11.5 billion to $264.2 billion. Goods exports slipped $1.1 billion to $178.2 billion.
A flood of imports as businesses rushed to beat higher prices from tariffs on foreign merchandise helped to send gross domestic product declining at a 0.5% annualized rate in the January-March quarter. The trade deficit sliced off a record 4.61 percentage points from GDP in the January-March quarter.
A sharp reversal is expected in the second quarter, though some of the boost to GDP was likely partially offset by businesses drawing down on some of the imports, which had landed in warehouses as inventory.
The government is scheduled to publish its advance estimate of second-quarter GDP on Wednesday. A Reuters survey of economists forecast economic growth rebounded at a 2.4% rate in the April-June quarter.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
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