Other economic data on Wednesday showed a widening of the trade deficit in June as solid domestic demand in the second quarter and a strong dollar sucked in imports of food and automobiles.
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Exports slipped 0.1% to $188.6 billion in June, the Commerce Department said Wednesday.
Exports fell for the second month in a row, down 0.1% to $188.6bn, as global demand weakened.
Trade has been volatile this year.
The strength in the dollar has made U.S. goods and services less attractive for overseas buyers.
“The current level of… goods exports remains far below trend and we have yet to see a decisive rebound following the resolution of the West coast port strike”, said Laura Rosner, an economist at French bank BNP Paribas.
In that report, the government estimated the economy expanded at a 2.3% annual pace, with trade adding 0.13 percentage point to GDP.
Exports to the European Union fell 2.3 percent, while imports surged 4 percent to a record high. The greenback appreciated about 22 percent from June 2014 through August 3 against a basket of major currencies. Imports of consumer goods – a category that includes clothes, furniture, and mobile phones – rose sharply in June after a small increase in May.
Resilience in job growth should help maintain steady demand from U.S. consumers, lifting imports.
Economists surveyed by MarketWatch had forecast the U.S. deficit to climb to $42.8 billion from a revised $40.9 billion in May.
Europe was among the beneficiaries of growing U.S. demand as imports from the region grew to a record, swelling the trade gap between the two areas to the biggest in comparable data back to 1992. Steady hiring has given almost 3 million more Americans paychecks in the past year, boosting their purchasing power. The deficits with Germany, France and the United Kingdom widened. Automobile imports hit a record $29.8 billion as the US auto market enjoys robust growth.
Yet trade officials were unable to reach a final agreement on the Trans-Pacific Partnership last week, as intended, partly because of differences over the treatment of dairy goods.
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Obama won a hard-fought battle in Congress in June to secure fast-track negotiating authority, which allows him to submit trade agreements to Congress for an up-or-down vote. Washington has long accused the Chinese government of keeping its yuan currency undervalued to gain an unfair cost advantage for Chinese exports.
