US trade deficit narrows in June

WASHINGTON, D. C.: The overall US trade deficit narrowed in June as exports rose faster than imports, the US Commerce Department reported Wednesday ( Thursday in Manila).

US exports rose by 9.4 percent to $158.3 billion in June while imports increased by 4.7 percent to $208.9 billion, the department said. Overall trade deficit declined by 7.5 percent to $50.7 billion from a revised $54.8 billion in May.

"Although exports rebounded more, causing the overall trade deficit to narrow, imports are just 15.2 percent off their previrus February level compared to over 25 percent for exports," Shannon Seery, an economist at Wells Fargo Securities, wrote Wednesday in a note.

"This report signals activity began to recover in June, but as

Covid cases have re- accelerated domestically and abroad the question remains to what extent the rebound progresses," Seery wrote, expecting a continued albeit modest recovery in the third quarter barring renewed lockdowns.

The narrowing trade deficit came after the department reported last week that the US economy contracted at an annual rate of 32.9 percent in the second quarter of the year, the steepest decline since the government began keeping records in 1947.

While the US economy is likely to rebound in the third quarter, economists are warning that a recent resurgence in Covid-19 cases across the country will undermine public confidence, dampen consumer spending and investment, and weigh on the fragile recovery nationwide.