WASHINGTON (AP) — The U.S. trade deficit fell in June to its lowest level since January as imports dropped sharply, led by lower shipments of cellphones, petroleum, and cars.
The trade deficit fell 7 percent in June to a seasonally adjusted $41.5 billion, from $44.7 billion in May, the Commerce Department said Wednesday.
Exports rose 0.1 percent to $195.9 billion, a record high. Imports fell 1.2 percent, the most in a year, to $237.4 billion.
Imports of petroleum products fell, cutting the trade deficit in petroleum to its lowest in four years.
The unexpected decline suggests that growth may have been stronger in the second quarter than the government initially estimated. A lower trade deficit can boost economic growth when it shows Americans are buying more U.S. products and fewer overseas goods.
The economy grew at a 4 percent annual rate in the April-June quarter, the government said last week. But that figure included an estimate of the June trade deficit that was higher than Wednesday's figure.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients that the deficit figures indicate growth may have been as high as 4.3 percent in the second quarter. The government will revise its figure for the April-June quarter later this month.
Imports surged in the first four months of this year, pushing the trade deficit to a two-year high in April. A slowdown in imports was likely after the surge, economists said.
June's decline comes after the trade deficit was a huge drag on the economy earlier this year, slowing growth by 1.7 percentage points in the first quarter. The economy shrank at a 2.1 percent seasonally adjusted annual rate in that quarter, the worst showing since the recession.
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