The US trade deficit widened slightly in July to 42bn dollars from the previous month's revised number of 41.9bn dollars, the Bureau of Economic Analysis (BEA) reported today; however, analysts were expecting a larger deficit of 44bn dollars.

Exports fell 1% to $183.3bn while imports declined 0.8% to $225.3bn.

The trade deficit with its largest trade partner, China, rose from $27.4bn to $29.4bn. The deficit also rose with: the European Union from $8.4bn to $12bn; Japan from $6bn to $6.8bn; Germany from $4.1bn to $4.9bn; Canada from $1.5bn to $2.1bn.

The deficit narrowed with OPEC from $8.5bn to $8.4bn and fell with Mexico from $5.9bn to $5bn.

Trade surpluses were registered with Australia ($2.1bn), Hong Kong ($1.8bn), and Singapore ($700m).

"Altogether, the widening in the nominal trade balance was less than we had forecast, but the widening in the real goods balance [adjusted for inflation] was more significant than our expectations," said analyst Michael Gapen from Barclays Research.

FM

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