Analysis of U.S. Balance of Trade, Exports, and Imports - August 2024

Summary:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced on August 6, 2024, that the goods and services deficit decreased to $73.1 billion in June 2024, $1.9 billion less than the revised deficit of $75.0 billion in May 2024.

Key data points from the report include:

Exports: June exports were $265.9 billion, an increase of $3.9 billion from May.

Imports: June imports were $339.0 billion, up by $2.0 billion from May.

Goods deficit: The goods deficit was $97.4 billion, $2.5 billion less than in May.

Services surplus: The services surplus was $24.2 billion, $0.6 billion less than in May.

The year-to-date deficit in goods and services is up $22.7 billion, or 5.6%, from the same period in 2023. Exports are up $58.0 billion from 2023 (3.8%) and imports are up $80.7 billion from 2023 (4.2%).

Detailed Analysis:

Exports:

The value of exported goods increased by $4.4 billion to $174.2 billion during June, with capital goods and industrial supplies, particularly civilian aircraft and natural gas and other petroleum products, respectively, driving the increase.

On the other hand, exports of services fell by $0.4 billion, to $91.7 billion, driven by a decline in travel services.

Imports:

Imports of goods increased by $1.9 billion to $271.6 billion while a significant uptick in consumer goods, especially pharmaceutical preparations, and capital goods, such as semiconductors and telecommunications equipment, was reported.

Imports of services inched up by $0.2 billion to $67.5 billion, with travel and maintenance and repair services showing small increases.

Trade Balance by Country:

The US had its largest deficits with China ($22.3 billion), the European Union ($18.0 billion), and Mexico ($13.7 billion). The deficit with China decreased by $1.6 billion between May and June.

Surpluses were recorded against countries such as the Netherlands ($4.8 billion), South and Central America ($3.6 billion), and Hong Kong ($2.1 billion).

Revisions for May 2024 are included in the report, showing exports of goods up by $0.3 billion and imports of goods down less than $0.1 billion, reflecting primarily late-arriving data and data corrections.

Implications:

All said, these numbers have to be taken as a positive development, with the declining trade deficit pointing to a strengthening of the export market for the US. However, the year-to-date increase in the overall level of the deficit still points to areas of weakness. The jump in exports, especially capital goods and industrial supplies, indicates robust demand for US goods abroad, while the decline in travel services exports to the EU and the slight increase in services imports may signal areas of recovery in the travel and tourism sector that should be kept under the microscope.

It is also instructive for following the extent of trade imbalances with particular countries through the breakdown of the trade balances given by country. The massive trade deficits with China and with the European Union tell us that these are the difficult issues that any future trade negotiations and policies might eventually have to tackle.

Overall the June 2024 trade data shows a mixed trend but the fact that exports kept on rising and the manageable import growth can help critics credibly predict that US trade balance is getting better step by step. We should continue to monitor the U.S. trade policy and support it in order to sustain the above-mentioned trend.

Source: U.S. INTERNATIONAL TRADE IN GOODS AND SERVICES, JUNE 2024