WASHINGTON – The Commerce Department reports on the U.S. trade deficit in June. The report will be released Wednesday at 8:30 a.m. Eastern.
LITTLE CHANGE: The forecast is that the deficit was roughly the same in June, at $44.3 billion, compared with $44.4 billion in May, according to a survey of economists by FactSet.
That would leave the trade gap below April's two-year high of $47.2 billion, when exports fell and imports surged to a record high, led by heavy imports of foreign-made cars.
GROWTH SLOWDOWN: The trade deficit was a big drag on the economy in the first three months of this year. Exports fell 9.2 percent in the first quarter, likely because of slower overseas growth. Europe has clawed its way out of recession but is growing slowly. And China's economy is cooling off from the rapid growth it has enjoyed for two decades.
Imports, meanwhile, rose in the first quarter. A wider trade deficit can act as a drag on growth because it means U.S. companies are earning less from their foreign sales. But strength in imports can also be a sign of growing consumer demand and a rebounding U.S. economy.
Overall, the trade deficit lowered growth by 1.6 percentage points in the first quarter. The economy shrank at a 2.1 percent seasonally adjusted annual rate, the worst showing since the recession.
Still, exports picked up in May, reaching an all-time high of $195.5 billion. Imports also fell. The government estimates that the trade gap was a much smaller drag on the economy in the second quarter, subtracting 0.6 percentage points from growth.
In 2013, the trade deficit declined by 11.4 percent. That reflected in part a boom in U.S. energy production that cut into America's dependence on foreign oil, while boosting U.S. petroleum exports to a record high.
The nation's trade balance in oil has continued to improve this year. The U.S. had a petroleum trade deficit of $90.7 billion through May of this year, down from $107.8 billion last year.