"This is exceptionally good news. This could suggest GDP could be increased by as much as 1 percent"
- Millan Mulraine, director of U.S. rates research at TD Securities USA LLC
The trade gap of the world's largest economy shrank more than initially expected in June, reaching the lowest level since October 2009, supported by strong exports and a drop in imports. The U.S. Commerce Department said that the trade balance, which is a difference in value between imported and exported goods and services, stood at -$34.2 billion, down from a revised -$44.1 billion in May. The majority of experts called for a $43.5 billion deficit. Figures mean that the deficit declined by 22.4%, the biggest monthly decrease since February 2009. The leaner gap between imports and exports was the result of a surge in exports, which advanced at the fastest rate in the past nine months, reaching $191.2 billion, as U.S. companies managed to sell the most goods and service abroad since records began. Meanwhile, imports dropped 2.5% to $225.4 billion.
Figures also showed that the so-called petroleum deficits, which account for almost 50% of the trade gap, reached the smallest level since August 2009. On average, U.S. companies shipped 8 million barrels per day in June, compared with just 7.7 million a month earlier, figure slightly above a 15-year low. The smaller trade bill suggests second-quarter growth figures were stronger than initially was predicted. However, the expected pickup in both consumer and corporate demand will make it difficult for the deficit to improve any further.
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