Economic Report: U.S. Trade Deficit Fell to Nine-Month Low in July

AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Monday Economic Report" from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).

By Chad Moutray, Ph.D., CBE – September 12, 2022

NAM Weekly Economic Toplines:

The U.S. trade deficit fell from $80.88 billion in June to $70.65 billion in July, the lowest since October and declining for the fourth straight month from the record $106.92 billion reading in March. These data have been skewed year to date by supply chain disruptions, petroleum prices and slowing global growth. The reduced trade deficit in July stemmed from a sizable decrease in goods imports (down from $282.55 billion to $274.08 billion, a five-month low) that more than outpaced a slight decline in goods exports (down from $183.29 billion to $182.99 billion). The goods trade deficit ($91.09 billion) was also the lowest since October. U.S.-manufactured goods exports totaled $746.62 billion through the first seven months of 2022, using non-seasonally adjusted data, soaring 16.10% from $643.07 billion year to date in 2021. Likewise, manufactured goods imports grew 18.38% year to date from $1,372.85 billion in 2021 to $1,625.24 billion for the same period in 2022.  U.S. consumer credit outstanding rose 6.2% at the annual rate in July, continuing to expand solidly. Revolving credit, which includes credit cards and other credit lines, jumped 11.6% in July. As such, Americans have continued to be willing to take on new debt, which could result in increased spending. Indeed, revolving credit has risen 14.3% over the past 12 months.   Meanwhile, nonrevolving credit, which includes auto and student loans, increased 4.4% in July, slowing from 16.8% growth in June. Overall, U.S. consumer credit outstanding has risen 7.7% over the past 12 months, the strongest year-over-year reading since November 2011.  The week ending Sept. 3 saw 222,000 initial unemployment claims, down from 228,000 for the week ending Aug. 27 and a three-month low. In contrast, the week ending Aug. 27 saw 1,473,000 continuing claims, up from 1,437,000 for the week ending Aug. 20 and a 21-week high. Continuing claims have trended higher since the spring, up from 1,306,000 for the week ending May 21. This week, there will be several indicators released that will provide more context on the current state of the U.S. economy and the manufacturing sector. This includes data on industrial production and manufacturing surveys from the New York and Philadelphia Federal Reserve Banks. There will also be clues about what the consumer is thinking, with sentiment data and retail sales figures. With the Federal Reserve likely to hike the federal funds rate again at the conclusion of its Federal Open Market Committee meeting on Sept. 20–21, one of the highlights this week will be updates on inflation, with data on the consumer and producer price indices out on Tuesday and Wednesday, respectively. READ FULL REPORT